Bitcoin (BTC) fell below $86,000 on Monday, exacerbating a liquidity imbalance as smaller buyers continued to purchase dips. Meanwhile, large holders are utilizing the demand to exit their positions, maintaining significant downside pressure.
Key takeaways:
Retail and mid-sized Bitcoin wallets accumulated $474 million in total buy-side volume, while whales offloaded $2.78 billion during the same timeframe.
Short-term BTC holders persisted in selling at a loss, indicating capitulation, though a reversal remains unconfirmed.
Bitcoin may test its quarterly low at $80,600 after invalidating its short-term bullish trend.
Whales dominate the sell-side as retail bets on a bottom
Order flow data from Hyblock Capital illustrated a notable divergence in behavior among participant classes. Retail traders or wallets ($0–$10,000) amassed a cumulative volume delta of $169 million, consistently bidding within the downtrend. Mid-sized participants ($1,000–$100,000) also established a $305 million net spot position as they sought to front-run a potential recovery.
However, whale wallets ($100,000–$10 million) remain the leading force, showing a negative $2.78 billion in cumulative volume delta. The combined purchasing power of retail and mid-sized traders is inadequate to absorb institutional-level distribution.
This leads to a liquidity mismatch where smaller players view prices below $100,000 as a bargain, whereas larger holders see the same price range as a chance to reduce their exposure.
Onchain analyst Axel Adler Jr. noted that the short-term holder spent output profit-ratio (seven-day SMA) has dipped below 1, currently hovering around 0.99. This suggests that coins held for less than 155 days are, on average, being sold at a loss.
Historically, such conditions have coincided with local capitulation phases, characterized by peak selling pressure. However, Adler stressed that mere stress is not a reversal indicator. A sustained recovery can only commence after SOPR reclaims and holds above 1, confirming that demand has begun to absorb supply.
Related: Bitcoin sees ‘pure manipulation’ as US sell-off liquidates $200M in an hour
Bitcoin open to revisit lower liquidity targets
From a technical perspective, Bitcoin’s structure has deteriorated further. BTC’s price has broken down from a rising wedge pattern, sweeping the monthly VWAP (volume-weighted average price) before exhibiting a bearish break of structure (BOS) below $87,600.
With the short-term bullish trend negated, BTC faces downside targets near previous liquidity pools or external liquidity.
The immediate targets include the $83,800 swing low, with a deeper retracement towards the $80,600 quarterly lows feasible if selling pressure continues. Currently, both order flow and onchain indicators suggest that patience is necessary before calling a sustainable bottom.
Related: Bitcoin parabola breakdown raises chance for 80% correction: Veteran trader
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
