Bitcoin is facing new pressure as geopolitical tensions in the Middle East change the macro landscape and weigh on risk assets. Rather than reacting to isolated headlines, the market reacts to broader changes in uncertainty, liquidity expectations and asset positioning. The price remains volatile and rallies struggle to gain traction as participants assess their exposure in an increasingly volatile environment.
CryptoQuant’s latest report sheds light on the critical shift in behavior through the Short-Term Holder (STH) P&L to stock metrics – a tool designed to track reactive cohort positioning. These investors, who are often responsible for increasing short-term volatility, tend to move coins to exchanges during times of stress, especially loss events.
During the February 5-6 surrender episode, STHs sent around 89,000 BTC to exchanges at a loss in a single 24-hour window, a clear signal of distribution panic. However, the dynamics developed after that. After this incident, harmful imports have steadily decreased.
This suggests that the immediate selling pressure by recent buyers is easing. The data shows that extreme panic has decreased. What is not aggressive accumulation is a gradual transition from forced liquidation to relative exhaustion—a subtle but important structural development.
Short-term holders are showing restraint as geopolitical pressure prevents new capitulations
A more accurate view of the short-term P&L Holder’s metrics for Exchanges adds nuance to the broader picture. Even amid the recent geopolitical escalation involving Iran—a class of event that has historically generated reactive risk flows—exchange inflows from short holders have not expanded significantly. While Bitcoin tested the $63,000-$64,000 zone, there was no corresponding increase in realized loss carry. For a group that is usually sensitive to volatility, this limitation is significant.
This behavior indicates a transition from reflexive panic to conditioned storage. In previous episodes of stress, similar price shocks in exchange-traded coins have produced notable increases as weak hands have rushed to eliminate risk. The absence of this pattern now means that a significant part of the forced sale has already occurred at the capitulation stage in early February.
Markets tend to stabilize only after the end sellers are exhausted. The incremental decline in loss carryover supports the thesis that liquidation pressure is being absorbed rather than re-accelerating.
Forward, the signal to control is stability. If short-term inflows remain muted, it will reinforce the case for seller fatigue and base-building conditions. Conversely, a resurgence in realized loss carryovers indicates that the capitulation is incomplete and opens the way for further volatility.
Bitcoin is near long-term support as the weekly structure remains volatile
For the week, Bitcoin is trying to stabilize near the $66,000 area after a strong rejection from the $90,000-$100,000 area. The broader structure shows the transition from expansion to correction: after the end of 2025, prices printed highs and finally lost the 50-week moving average (blue), which acted as dynamic support during most of the previous trend.
After Bitcoin broke below the 100-week moving average (green), the breakout accelerated and led to a quick move towards the $60Ks midpoint. This area now represents an important turning point. While the 200-week moving average (red) near $60,000 remains unchanged, the price is getting uncomfortably close to this long-term trend. Historically, a sustained close below the 200-week moving average indicates deeper macro weakness.
Volume expanded significantly during the weekly sell-off, which suggests forced liquidation and liquidation pressure rather than a gradual distribution. However, the last candles show smaller bodies and lower lows, which indicate a short-term equilibrium.
Technically, $69,000-$70,000 now acts as immediate resistance and aligns with previous oversupply support. A weekly reversal of this area will be the first signal of structural recovery. Conversely, a failure to defend the $62,000-$64,000 zone could pave the way for a broader macro-playback.
Featured image from ChatGPT, chart from TradingView.com
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