The price of Bitcoin is facing renewed pressure as deteriorating technical indicators and on-chain exhaustion impact the market. This decline coincides with a trend of capital shifting towards altcoins, further straining the leading cryptocurrency.
Summary
- Bitcoin has fallen below $113,000 once more, down 2.5% today
- On-chain data indicates a depletion of profitability, diminishing BTC’s appeal to institutional investors.
- Despite hopes for a rotation, the Altcoin Season Index has dropped to 64, signaling waning interest after an earlier surge.
- Major altcoins have also seen significant declines, with ETH, XRP, SOL, DOGE, and ADA down between 5% and 11%.
Bitcoin slipped below the $113,000 threshold on Monday, reigniting concerns across the cryptocurrency market. According to data from crypto.news, the asset is currently trading at $112,909, reflecting a decline of approximately 2.5% on the day. This drop represents a substantial retreat from its peak near $118,000 earlier in the week, accumulating a 3% loss over the past seven days and highlighting increasing volatility and uncertainty for the flagship cryptocurrency.
Over the last week, Bitcoin (BTC) has struggled to sustain its upward momentum. Continued resistance and diminishing buying pressure have contributed to the price decline, which has accelerated losses to levels not seen in over a week.
Weak technical indicators and on-chain exhaustion drive Bitcoin price decline
Technical indicators signal caution. Bitcoin’s Relative Strength Index (RSI) has fallen to 45.57, reflecting a loss of momentum. Simultaneously, the MACD has crossed downwards, signaling bearish sentiment as buying pressure wanes. Additionally, futures volume has increased by 137.2% to $72.97 billion, indicating heightened speculative activity as traders seek to capitalize on the volatility.
On-chain metrics reinforce the bearish sentiment. A recent analysis by CryptoQuant researcher Joao Wedson highlights the signs of cycle exhaustion. He notes that Bitcoin’s SOPR (Spent Output Profit Ratio) Trend Signal indicates diminishing profitability. The analyst cautions that accumulation at current levels is unprecedented, with many investors purchasing BTC at historically high prices instead of during more favorable earlier periods.
Joao also remarked that the Short-Term Holder Realized Price, currently at $111,400, serves as a significant reference point, especially for institutions that missed earlier accumulation phases. He further stated that the Sharpe Ratio, a measure of risk-adjusted returns, has declined compared to 2024, making Bitcoin less appealing to large institutional investors.
A decrease in social interest surrounding BTC is contributing to the negative outlook. Joao observed that altcoins are more likely to regain public focus, with the market potentially shifting from Bitcoin to altcoins utilizing reserves accumulated during previous rallies.
“We are in an Altcoin Season, and that’s where your attention should be,” he stated.
Altcoins face challenges despite rotation narrative
However, despite the analyst’s optimism regarding altcoins, current market indicators suggest otherwise. The Altcoin Season Index, which surged to 78 last week, has fallen to 64, indicating a cooling sentiment.
In terms of price movements, many of these assets have also retreated into negative territory, similar to Bitcoin. Ethereum (ETH) has decreased by 7.23% in the last 24 hours, trading at $4,158.99, while XRP (XRP) has dropped approximately 7.25% to $2.79. BNB (BNB), despite a recent bullish trend, has also decreased by 5.09% to $1,014. Solana (SOL) is down nearly 8%, and Dogecoin (DOGE) has experienced over 11% in losses, with other major cryptocurrencies like Cardano (ADA) and TRON (TRX) also facing significant declines.
Adding to market caution, the Crypto Fear and Greed Index currently stands at 47, indicating “Neutral” territory but moving towards fear. For now, both Bitcoin and the broader altcoin market continue to be under pressure, with traders awaiting clearer signals before re-engaging in force.
