Bitcoin has faced massive volatility and selling pressure despite positive developments regarding the US Strategic Bitcoin Reserve. On Thursday, US President Donald Trump confirmed the establishment of the reserve by signing an Executive Order, marking a significant shift in US crypto policy. However, BTC has struggled to gain momentum, remaining below the $90,000 level since the start of the week as bears take control of short-term price action.
The market reaction has been unexpectedly bearish, with BTC failing to capitalize on the bullish narrative surrounding the Bitcoin reserve announcement. Instead, sellers have dominated, keeping prices suppressed as uncertainty continues to drive volatility.
Key on-chain metrics from CryptoQuant reveal concerning signals—Bitcoin’s price is currently below both the Realized Price and the MVRV Short-Term Holder (STH) indicator. Historically, trading below these levels suggests that short-term holders are at a loss, often signaling weak market sentiment and a lack of strong buying pressure.
Bitcoin Price Struggles To Set A Clear Direction
Bitcoin has lost over 28% of its value since January 20, as negative sentiment surrounding macroeconomic conditions and global economic uncertainty weighs on the market. Fears of an escalating trade war and rising volatility have fueled one of Bitcoin’s most unpredictable market cycles, leaving both bulls and bears struggling for control.
The crypto market remains in a delicate position, with BTC failing to reclaim key resistance levels as uncertainty dominates short-term price action. Analysts are closely watching BTC’s next move, as a break above key levels could surprise many investors who currently doubt the continuation of the bull rally. Some experts believe that BTC could still make a strong push higher, catching bearish traders off guard and forcing a short squeeze.
Top analyst Maartun shared insights on X, pointing out a crucial technical signal—Bitcoin is still trading below the Short-Term Average Cost Basis. This metric tracks the average price short-term holders paid for BTC, and when BTC trades below this level, it means many recent buyers are at a loss. Historically, this has been a pivotal moment for Bitcoin, as it often signals either a deeper correction or an imminent reversal if buying pressure returns.
With BTC hovering at critical levels, the coming days will be key in determining its next move. If Bitcoin reclaims its Short-Term Average Cost Basis, it could be the catalyst for a strong recovery. However, failure to do so may lead to further downside, extending the current bearish sentiment. Investors and traders are closely monitoring Bitcoin’s ability to hold support or if more pain is ahead for short-term holders.
BTC Price Action: Technical Details
Bitcoin is currently trading at $86,000 after experiencing days of massive selling pressure and uncertainty. Despite attempts to regain momentum, BTC remains in a fragile position, with bulls struggling to reclaim key resistance levels.
The most important support to defend right now is $85,000. If BTC holds above this level in the coming days, it could set the stage for a push toward $92,000-$93,000, a critical resistance zone aligned with the 4-hour 200 Moving Average (MA) and Exponential Moving Average (EMA). Reclaiming this area would signal renewed buying strength, potentially shifting sentiment back in favor of the bulls.
However, if Bitcoin loses the $85K support, it could trigger another wave of selling pressure, pushing BTC below the $80,000 mark. A breakdown of this magnitude could lead to increased volatility, forcing BTC into lower demand zones and delaying any meaningful recovery.
With Bitcoin at a pivotal level, traders are closely watching price action to determine whether BTC can stabilize and break higher or if bears will extend the current downturn. The next few sessions will be crucial, as BTC’s ability to hold or lose $85K could define its short-term direction.
Featured image from Dall-E, chart from TradingView
Source: https://bitcoinist.com/bitcoin-trades-below-short-term-average-cost-basis-key-insights/