Bitcoin's Pullback Phase: Analyst Insights

Bitcoin is currently facing a pullback amid a backdrop of macroeconomic uncertainty. Analysts suggest that it may take time for Bitcoin to rebound to its previous all-time high (ATH) of $109,000, which it reached in January.

According to crypto analyst XBTManager, this phase is considered a consolidation period following the ATH. The analyst noted that liquidity needs could extend this phase for a while.

Long Positions May Become Viable Again

XBTManager pointed out that Bitcoin long positions might become more favorable once certain market behaviors change. Specifically, this would occur if short-term holders of Bitcoin—defined as those who have held the asset for less than 155 days—start selling off their holdings and long-term holders begin to re-enter the market as buyers.

Until this shift occurs, XBTManager advises traders to exercise caution when considering new positions in Bitcoin. “Over the next few months, it's wise to be risk-averse and avoid high-risk trades,” the analyst stated.

Leading up to Bitcoin's historic peak of $109,000 on January 20, there was a noticeable increase in supply from short-term holders who started selling their assets. At the same time, long-term holders reduced their positions by selling off some of their Bitcoin. This situation is similar to what happened in December when Bitcoin first crossed the six-figure mark.

After reaching the January ATH, Bitcoin's long-term holder supply dropped significantly—around 100,000 BTC—over the next 30 days. Another significant decline occurred in December, highlighting a trend that affects the asset's price and stability.

As of now, long-term holder supply stands at 14.4 million BTC, reflecting a decline of about 800,000 BTC since December 1. This reduction in supply suggests that while market conditions are uncertain, long-term holders are less willing to sell at this stage.

Bitcoin's value has fluctuated recently, falling to below $100,000 on February 4 amid concerns related to potential trade wars. It dropped further to $85,000 at the end of February as new tariffs were confirmed in the U.S., leading to a dramatic loss in value close to $80,000.

Currently, Bitcoin is trading around $87,100, demonstrating the ongoing volatility and uncertainty in the market. With these conditions in mind, stakeholders are closely monitoring both short-term and long-term holders’ behaviors, as they will likely influence Bitcoin's pricing trajectory in the near future.

This article does not provide investment advice. All investment decisions entail risks, and readers are encouraged to do their own research.

Bitcoin, Consolidation, Analysis