Bitcoin's Struggle: What's Holding It Back?

Market Caution Dominates as Bitcoin Faces Volatility

Recent Turbulence

Bitcoin has been struggling to maintain its position above the $110,000 mark. The market appears to be exercising extreme caution in recent times. Last week, Bitcoin experienced a significant drop from $115,000 to $104,000, which shook up many investors and cleared out some of the weaker ones.

Current Status

Bitcoin has rebounded slightly to around $111,000, but the market remains shaky. The Relative Strength Index (RSI), which measures momentum, is starting to recover from oversold levels. However, the cumulative volume delta is still negative, indicating that more people are selling than buying. Spot trading volumes are also low, suggesting that investors are not convinced about the current prices.

Market Sentiment

In the futures and options markets, investors are reducing their risk. Open interest has fallen, funding rates have eased, and more investors are seeking protection against further drops. Short-term holders are also increasing their supply, indicating a lot of speculative money in the market.

Long-Term Holders' Impact

Long-term Bitcoin holders have been selling steadily since July. This has added significant pressure on the market. Since October 15th, long-term holders have sold about 28,000 BTC. Daily outflows have increased from 12,500 BTC in early July to an average of 22,500 BTC over the last 30 days. This trend, which began in late August, suggests that long-term holders are taking profits, a sign of a late-cycle distribution phase.

Future Outlook

All these factors suggest that Bitcoin's upside is limited for now. The market structure remains fragile, and caution is dominating over conviction. Until long-term holders stop selling and confidence returns, it is likely that Bitcoin will struggle to make significant gains.