Expert Insights on Bitcoin’s Market Volatility
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Bitcoin Faces Continued Market Volatility Amidst US-China Tensions
The financial markets have been turbulent following the trade tensions between the US and China, with Bitcoin experiencing significant price fluctuations. Recently, Bitcoin’s price fell below the $110,000 threshold after a brief surge on Sunday, highlighting its ongoing volatility. This bearish trend has resulted in substantial losses for investors, particularly those holding Bitcoin for the short term.
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Increasing Realized Losses for Short-Term Bitcoin Investors
Amidst the current market volatility, short-term Bitcoin investors are witnessing significant realized losses. On-chain data reveals that these investors are bearing the brunt of the recent downturn. The Bitcoin Realized Profit/Loss (RPL) ratio for short-term holders indicates a sharp decline, reflecting the challenges faced by these investors.
CryptoQuant author and enthusiast, Darkfost, shared insights on social media platform X, highlighting the downturn in the RPL ratio for short-term BTC holders. This decline signifies increased pressure on investors, leading many who purchased Bitcoin in recent weeks or months to sell at a loss. Such sell-offs often indicate capitulation among weak hands, potentially paving the way for new accumulation phases and eventual market recovery.
Market analysts note that short-term holders are grappling with pronounced losses. At the time of Darkfost’s post, the realized price for these holders was around $113,000. The RPL ratio’s drop to -1.4 mirrors conditions similar to the April 2025 correction. This situation suggests that while short-term holders face adversity, it could also herald opportunities and a market bottom formation.
Darkfost emphasized that this pattern aligns with historical market cycles, and current trends suggest the final phase of correction. The presence of sporadic volatility spikes during the broader upward movement underscores the cyclical nature of Bitcoin’s market behavior.
Long-Term Bitcoin Holders Reducing Market Exposure
Darkfost’s analysis of the Long-Term Holder Supply Net Position Change over a 30-day period reveals that long-term Bitcoin holders are also reducing their market exposure. In October, these holders took advantage of the opportunity to decrease their holdings, resulting in a 2.2% decline in long-term supply, equating to over 330,000 BTC. This reduction, while notable, is modest compared to previous declines in December 2024 and March 2024, which were approximately twice as large.
Darkfost considers this trend significant and recommends close monitoring. As of the latest data, Bitcoin’s price was trading at $107,544, having dropped nearly 3% in the past 24 hours. Despite this decline, there is a growing bullish sentiment among investors, as evidenced by a more than 55% increase in trading volume.
Bitcoin trading remains dynamic, as seen on the 1D chart with BTCUSDT on Tradingview.com.
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