BTC Market Analysis

• BTC Short-Term Holders (STHs) may have panicked and sold due to recent news of the Bybit hack.
• A decline in the 90-Day Active Supply was noted in recent months.

In the past 24 hours, Bitcoin (BTC) experienced notable volatility. Short-Term Holders (STHs) realized substantial losses, likely driven by panic selling following the Bybit hack news.

Over the last 16 hours, BTC’s 4-hour chart on Binance revealed significant bearish indicators. The Exponential Moving Average (EMA) cross showed a bearish crossover, with the 9-period EMA dropping below the 26-period EMA around hour 14, signaling short-term downward momentum. This coincided with BTC’s price drop to $96,259.9, marking a -0.12% decline from the previous period.

The Relative Strength Index (RSI) stood at 46.05, reflecting a neutral but slightly bearish outlook. This RSI level suggested that BTC was in a consolidation phase, with no clear overbought or oversold conditions. If it rebounds above 50, bullish sentiment could return, supporting price recovery.

Additionally, the Cumulative Volume Delta (CVD) showed a net volume delta of -94.67K, reflecting strong selling pressure in the last 8 hours. Combined signals indicated capitulation, where STHs sold off BTC, possibly forming a short-term local bottom as selling pressure eased.

Panic Selling Peaks: What is the Turning Point?

The Short-Term Holder Profit & Loss (P&L) to Exchanges Sum chart over the last 24 hours highlighted significant losses among STHs. The dominance of red bars peaked at -43.9K BTC, indicating heavy panic selling around $90K to $95K following the Bybit hack news. The STH profit line remained minimal, suggesting few short-term traders saw gains. Similar trends were present in early 2022, where high realized losses preceded price recoveries.

This data hinted at a potential local bottom, as distressed selling typically exhausts downward momentum, creating a buying opportunity for traders.

BTC’s Liquidity Shift

Analysis of the 90-Day Active Supply chart for BTC, covering 2012 to 2025, reflected a notable decline in recent months. By early 2025, active supply hovered around 4M BTC, down from 6M BTC in late 2024. This metric indicated a decline in trading activity. Rising active supply generally suggests higher demand and bullish sentiment, while declines signal distribution and reduced interest. This trend suggested that STHs had largely exited, potentially mitigating selling pressure.

This pattern mirrored 2018, where declining active supply preceded price stabilization, supporting the capitulation hypothesis and reinforcing short-term bottom formation.

A Sign of Strength or Further Decline?

Deep analysis of the BTC netflow chart for aggregated exchanges over the last three months observed a sharp net outflow of -546.11 BTC in the past 24 hours. This marked a significant reversal from the previous week’s +226.57 BTC average inflows and the 30-day average of +1.29K BTC inflows. A sudden negative netflow typically indicates holders withdrawing BTC to off-exchange wallets, suggesting reduced selling pressure.

This pattern resembled mid-2021 when large BTC outflows preceded price rebounds. Furthermore, a 24-hour netflow change of +269.71 BTC indicated renewed buying interest.

In conclusion, capitulation events, such as heavy short-term holder losses and declining exchange netflows, historically precede short-term recoveries. While short-term volatility remains, long-term indicators suggest a potential shift toward recovery as selling pressure subsides.