Bitcoin (BTC) fell below $86,000 on Monday, exacerbating a liquidity imbalance as smaller investors continued to buy on dips. Meanwhile, larger holders are seizing the opportunity to exit their positions, exerting sustained downside pressure.
Key highlights:
Retail and mid-sized Bitcoin wallets acquired $474 million in cumulative buy-side volume, while whales offloaded $2.78 billion in the same timeframe.
Short-term BTC holders persisted in selling at a loss, indicating capitulation, yet a reversal has not yet been established.
Bitcoin may revisit quarterly lows at $80,600 after negating its short-term bullish trend.
Whales lead the sell-side while retail anticipates a bottom
Order flow data from Hyblock Capital illustrated a pronounced divergence in behavior among different types of participants. Retail traders or wallets ($0–$10,000) accumulated a cumulative volume delta of $169 million, consistently placing bids during the downtrend. Mid-sized participants ($1,000–$100,000) also established a $305 million net spot position, attempting to preempt a recovery.
However, whale wallets ($100,000–$10 million) remain overwhelmingly dominant, with a negative $2.78 billion in cumulative volume delta. The combined buying force of retail and mid-sized traders is not enough to counteract institutional-level distribution.
This creates a liquidity imbalance where smaller investors see sub-$100,000 prices as a bargain while larger holders view the same range as a chance to decrease their exposure.
Onchain analyst Axel Adler Jr noted that the short-term holder spent output profit ratio (7-day SMA) has dipped below 1, presently around 0.99. This signals that coins held for under 155 days are, on average, being sold at a loss.
Historically, such situations have coincided with local capitulation phases, characterized by increased selling pressure. However, Adler stressed that merely experiencing stress is not a reversal indicator. A sustained recovery could start once SOPR reclaims and holds above 1, confirming that demand is beginning to outpace supply.
Related: Bitcoin sees ‘pure manipulation’ as US sell-off liquidates $200M in an hour
Bitcoin poised to revisit lower liquidity targets
From a technical perspective, Bitcoin’s structure has further deteriorated. BTC’s price has broken down from a rising wedge pattern, dipping below the monthly VWAP (volume-weighted average price) and making a bearish break of structure (BOS) under $87,600.
With the short-term bullish trend invalidated, BTC now faces downside targets near earlier liquidity pools or external liquidity.
Immediate targets remain at the $83,800 swing low, with a deeper retracement towards the $80,600 quarterly lows likely if selling pressure continues. At this point, both order flow and onchain indicators suggest that caution is warranted before asserting a solid bottom.
Related: Bitcoin parabola breakdown raises chance for 80% correction: Veteran trader
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.
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.
