Bitcoin Faces Significant Price Volatility
Bitcoin has recently faced significant price volatility, sparking heightened anxiety among short-term investors. Over the past week, BTC has dropped approximately 5.8%, with a 1.4% decline on the daily charts, bringing its price down to $82,010. Meanwhile, BTC’s trading volume has surged by 33.21% to $20.42 billion, reflecting increased market activity amid uncertainty.
This downturn has triggered extreme panic among short-term holders, particularly those who have held Bitcoin for less than 155 days. Several key on-chain indicators suggest that this group is experiencing big losses.
According to CryptoQuant, the Spent Output Profit Ratio (SOPR) for short-term holders remains below 1, indicating that most Bitcoin transactions are occurring at a loss. Additionally, the Market Value to Realized Value (MVRV) ratio for this group has dropped to 0.86, signaling that many short-term holders are now underwater, holding BTC below their initial purchase price.
Crypto Market Turmoil
The broader market is showing clear signs of growing investor anxiety. The Crypto Fear & Greed Index, which ranges from 0 (extreme fear) to 100 (extreme greed), has dropped to 24, firmly placing sentiment in the “Extreme Fear” zone. While this marks a slight improvement from last month’s 21, it’s still a decline from last week’s 31, reflecting persistent unease. The year’s lowest fear level was recorded at 15 on March 11, while market greed peaked at 88 on November 21, 2024.
Investor confidence remains fragile, weighed down by escalating uncertainty around global trade policies, particularly those introduced by President Donald Trump. His aggressive stance on trade, branding April 2 as “Liberation Day,” has only intensified market jitters.
In the derivatives markets, traders appear to be adjusting their positions. Open interest has fallen 2.72% to $52.95 billion, according to data from Coinglass. However, on BitMEX, Bitcoin’s open interest jumped from $250 million to $291 million in just 48 hours, suggesting a spike in leveraged activity.
Meanwhile, options trading volume surged 79.30% to $1.99 billion, with options open interest ticking up 2.67% to $21.69 billion. Crypto analyst Ali Martinez has raised concerns about Bitcoin’s ability to sustain a rally, pointing out that while many expect Bitcoin to rise with increasing liquidity, the Global Money Supply has actually shrunk by nearly $1 trillion in the past two weeks.
Martinez also identifies two key resistance levels Bitcoin must break to regain bullish momentum: $90,700, the short-term holder realized price, and $97,300, the three-month realized price. Meanwhile, market uncertainty deepens as Bitcoin ETF flows reverse course, with investors pulling out $93 million, breaking a 10-day streak of continuous inflows. Notably, Fidelity’s FBTC saw the largest withdrawals, fueling concerns about a shift in short-term sentiment.