Bitcoin’s sharp decline could continue as panic selling spreads from long term holders to short term traders across the market.
Growing Panic Across the Bitcoin Market
Bitcoin’s latest downturn is increasingly being viewed as a wider market crisis rather than a simple short term correction, as on chain data suggests a chain reaction of selling fueled by leverage liquidations and rising fear in the spot market.
According to data from CryptoQuant, investors who accumulated Bitcoin between six and twelve months ago are facing significant pressure because their average realized entry price is estimated around $110,851.
Following the recent decline, many of these holders moved into substantial unrealized losses, triggering a surge in exchange inflows beginning on May 14.
CryptoQuant’s metrics showed that the Spent Output Age Bands ratio for coins held between six and twelve months climbed to 10.54%, far above its normal level below 1%.
Historically, spikes of this magnitude have reflected large scale capitulation from long term holders as investors lock in losses and exit positions, adding further selling pressure to the spot market.
The weakness has now spread to short term traders as well.
Although exchange inflows are usually dominated by coins held for less than one day, profitability indicators now point to increasing panic driven selling activity.
On May 16, the Short Term Holder SOPR dropped to 0.994, while the adjusted SOPR fell to 0.996. Both readings moved below the important 1.0 threshold that typically separates profit taking from selling at a loss.
Even on May 17, the Short Term Holder SOPR remained weak at 0.999.
CryptoQuant stated that the data confirms many short term investors are now exiting positions at losses rather than securing profits.
The analytics firm warned that a rapid V shaped recovery appears unlikely until what it described as “toxic” supply is fully absorbed and broader market sentiment begins to stabilize.
Analysts Warn of a Larger Correction
The worsening market conditions have reinforced bearish expectations among several crypto analysts.
Crypto market commentator Doctor Profit once again warned that Bitcoin could be approaching a major correction.
Another analyst known as Mr. Wall Street also suggested Bitcoin may experience a significantly deeper decline following its recent 10% pullback.
According to the analyst, bullish momentum has already weakened considerably, and Bitcoin could eventually fall toward the $45,000 level.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
