Bitcoin selling pressure from mid-term holders has significantly declined as prices consolidate above $65,000. According to VanEck analysts, the main sellers who bought 1-2 years ago have reduced offloading after falling underwater, though realized losses have surpassed $22 billion. While miner hash rate declines could historically precede price recoveries, options market data shows continued investor caution against further downside.
Bitcoin has been consolidating above $65,000 for over a week following a 46% drop from its peak near $126,000. VanEck analysts led by Mathew Sigel reported that holders who bought Bitcoin 1-2 years ago were the largest sellers late last year.
However, this cohort has dramatically slowed its selling pace, as most bought at an average price of $72,000 and are now underwater. Sigel stated, “Over the past month, selling from older cohorts, >1yr, has fallen significantly to an expected total of 517k BTC in February.”
He concluded that Bitcoin distribution was slowing but warned investors might still take painful losses. So far, realized losses have crossed $22 billion, underscoring capitulation.
The price decline has also reduced miner revenue and contributed to a 14% drop in the network’s hash rate over 90 days. The analysts noted that such sustained hash rate contractions have historically preceded strong forward returns for Bitcoin over the subsequent 90 days.
Market sentiment remains cautious despite potential stabilizing factors like the anticipated CLARITY Act. Data from Glassnode shows options flows and skew heavily leaning towards hedging against downside risk.
Put skew remains elevated, indicating relatively higher demand for bearish bets than bullish ones. This positioning suggests investors are guarding against another price drop even amid possible recovery signals.
