Macroeconomic pressure was the driving factor behind the synchronized extreme fear across crypto and equities markets, AMBCrypto noted in a recent report.
Over the past three weeks, Bitcoin [BTC] managed to rally from the $64k lows against the backdrop of geopolitical tensions.
A market crash below $45k was more likely than a recovery beyond $100k, a recent Polymarket post highlighted. The expectation of such a sharp crash was overblown, as it discounts the “silent buy walls Wall St. has stacked at the $55k threshold.”
While the long-term trend remained bearish and recovery to $100k was unlikely, the $65k area remained a strong short-term demand zone. Unfortunately for the Bitcoin bulls, the demand has been weak recently.
Assessing Bitcoin’s demand exhaustion factor
In mid-March, the 24-hour moving average of the net realized profit/loss metric reached figures of nearly $17 million per hour. It showed that the price spike above $75k was being used to aggressively take profits.
In the wider scheme, the $17 million/hr was a modest reading, but it was able to suppress the Bitcoin rally. Over the weekend, the net realized profit/loss metric saw a positive spike once again.
On Sunday, the 22nd of March, the net realized profit reached $23.4 million/hour even as bulls and bears battled for control of $70k. The bears won the battle, reflecting profit-taking selling.
Within a day, Asian stock markets plunged amid a worsening energy crisis.
The increased realized profit showed profit-taking and seller dominance. The holder accumulation ratio continued the downtrend it has been on over the past month.
It was another sign that active BTC holders were using the price bounce to sell their holdings.
President Trump’s 48-hour ultimatum forced a $300 million liquidation wave in crypto markets in the past 24 hours. The spooked U.S.-based investor sentiment was evident in the falling Coinbase Premium Index.
The metric had been hopeful a week ago, when Bitcoin was challenging the $75k level. Since then, it has retreated below zero.
In the coming days, a lack of demand and strong incentives to take profits can hurt potential Bitcoin price rallies. From a technical perspective, the $65k area was a strong support zone that could still yield a bullish reaction.
Final Summary
- Bitcoin faced a surge in liquidations as prices fell below the $70k psychological level over the weekend.
- Demand exhaustion and increased profit-taking tendencies have capped the Bitcoin rally’s potential.
