With a short stroke, Bitcoin price has now bounced back above the key $70,000 level and is once again showing signs of a pullback. As a result, BTC seems to be showing the first signs of stabilization after a wave of market-wide capitulations.
Bitcoin’s perceived losses dominate the market
The broader cryptocurrency market is showing positive signs, and the price of Bitcoin has since risen slightly the period of surrender. However, according to key chain data, the current market pain seems far from over.
Certified Author at CryptoQuant and Darkfost Market Expert joint that the market’s losses will ease after the capitulation, but the perceived losses in this context still dominate Bitcoin in the face of increased uncertainty. As loss occurred The chain continues to outperform, indicating that many investors are still closing their positions below their value.
The data shows that there is currently a realized loss of $611 million against a profit of $346 million, resulting in a net profit and loss (PnL) of -$264 million for the week. This pattern often occurs during significant corrections, when the most extreme selling declines, but the market is still processing the effects of the last drops.
Although the market remains in negative territory, this profit and loss gap shows a clear improvement in the situation. On February 7, Darkfost highlighted that the average PnL is about $2 billion, which shows a clear capitulation, as the price of Bitcoin fell below the $60,000 level.
During this market trend, short term BTC holders were always the most active players in the sector. These investors are currently holding a larger share of the supply than the bear market, leaving Bitcoin in a fragile phase.
In January 2023, percent Bitcoin supply classified as short-term holders was 12%, but today, it is 22%, an indicator of 2x growth. At this point, it is important to continue and maintain the momentum of BTC. This slight stability reinforces the sentiment of holding and accumulation among many investors, adding to the current consolidation. Meanwhile, it would be a definite improvement to see PnL back in positive territory after more than four months of losses and surrenders.
Funding rates show a negative trend
As Bitcoin struggles to regain its upward trajectory, certain areas seem to be holding back the asset. For example, BTC funding rates are showing bearish action. CW, data analyst and crypto investor, is emphasized that most of the range when the BTC futures rate fell to a negative value, the bottom of one short-term decline.
CW has since noted an overall upward trend, with no decline yet confirmed. Currently, the funding rate is again in negative territory, which means that the current price is short-term down for BTC.
Featured image from Pngtree, chart from Tradingview.com
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