- Bitcoin’s market faces volatility with a $359.7M liquidation event and shifting sentiment.
- CryptoQuant analysis shows Bitcoin’s price holding strong above key support levels.
- Bitcoin’s declining exchange supply reflects long-term holder confidence amid volatility.
Bitcoin’s price has seen notable fluctuations in recent months. From over $90,000 in early February, it dropped to around $77,000 by mid-March. Despite this dip, the crypto staged a recovery, climbing back to approximately $85,000 by the end of March.
This recent trend highlights both the volatility and the resilience of Bitcoin in the current market. As the market continues to evolve, a variety of factors have influenced these price movements.
Bitcoin’s Short-Term Momentum
Over the last week, Bitcoin has shown a steady upward trajectory, reflecting renewed investor confidence. The price has increased by 0.4% in the last 24 hours and 9% over the past seven days. This rise signals positive short-term momentum for the asset, suggesting that recent price drops have not deterred investor interest. In the long term, Bitcoin has seen a 27.2% increase over the past year, indicating substantial growth despite periods of volatility.
Notably, per CryptoQuant data, the recent liquidation event triggered by a drop in Bitcoin’s price has further impacted market dynamics. A major million liquidation in long positions occurred, following a significant price dip.
This type of liquidation happens when leveraged traders are forced to sell their positions due to insufficient margins. Consequently, many long positions were wiped out, which could present an opportunity for a market reversal if the price stabilizes.
Bitcoin’s Price Support and Resistance Levels
Per CryptoQuant, Bitcoin’s price behavior also aligns with the Realized Price by UTXO Age Bands, which provides insights into market trends. Short-term holders, those with Bitcoin for less than a week, are currently in profit, as the market price is above the realized price for 1-day to 1-week UTXOs. In contrast, the 1-week to 1-month UTXO cohort has shown strong support, with the realized price sitting around $84,740. If Bitcoin’s price approaches this level, it could act as a significant support zone.
CryptoQuant also highlighted the significance of these UTXO age bands, suggesting that a breakdown below the short-term realized price could indicate a potential price correction. However, maintaining above these levels would demonstrate continued strength in demand for Bitcoin, especially as holders show a preference for long-term accumulation.
Options Expiry and Market Sentiment Shift
Adding to the current volatility is the record-breaking $14.3 billion Bitcoin options expiry, scheduled for March 28. The expiry of such a large volume of options has raised concerns about its market impact.
Despite the substantial amount, many bullish positions were invalidated when Bitcoin’s price fell below $90,000. As a result, the advantage for bullish bets has weakened. However, Bitcoin’s price is still hovering around key levels, with $7.6 billion in call options set at $92,000 or higher, indicating that a price increase could trigger these options to become viable.
Meanwhile, a shift in market sentiment is underway as Bitcoin holders move their assets off exchanges.
Data from Santiment shows that Bitcoin’s supply on centralized exchanges has dropped to a 7-year low, signaling that many investors are holding Bitcoin for the long term. This reduction in supply may ease selling pressure, especially as Bitcoin’s role as a store of value grows among institutional investors and long-term holders.
