Bitcoin Remains In A High-Risk Zone As Short-Term Holders Stay Underwater

Bitcoin Struggles to Maintain Key Levels Amid Uncertain Market Sentiment

Bitcoin is currently facing challenges in holding the $90,000 level after experiencing a significant rejection from the $94,000 resistance zone. This situation has led to a divided market sentiment, with some analysts suggesting that Bitcoin is entering a deeper corrective phase, while others view the pullback as a necessary reset before a potential upside attempt. The ongoing price action reflects this uncertainty, characterized by rising volatility as buyers and sellers vie for short-term control.

Current Market Analysis

According to an analysis by Axel Adler, the short-term risk structure for Bitcoin remains fragile. The current price is trading below the Short-Term Holder (STH) Cost Basis, which is estimated to be around $100,200. This positioning places Bitcoin within a moderate risk zone, specifically between the STH Cost Basis and a -15% downside boundary. As Bitcoin hovers around $91,000, this suggests that any recent rebounds should be approached with caution. Until Bitcoin reclaims the STH Cost Basis, upward movements are likely to be interpreted as technical bounces within a prevailing downward trend, rather than a definitive reversal.

Adler’s analysis further highlights the importance of Bitcoin’s all-time highs, euphoria zones, and the Short-Term Holder Market Value to Realized Value (STH MVRV) indicator. The STH MVRV, which measures the ratio between Bitcoin’s current market price and the average realized price of coins held by short-term investors, currently sits below its historical mean. Specifically, it is near 0.92, significantly under the neutral level of 1.0. This suggests that the average short-term holder is experiencing an unrealized loss of around 8%. Historically, periods where the STH MVRV remains below 1.0 have often coincided with capitulation phases or extended consolidation ranges, rather than sustained bullish movements.

As long as the STH MVRV stays beneath breakeven, short-term holders are likely to sell into rallies as prices approach their cost basis. This behavior contributes to persistent overhead supply, reinforcing structural resistance near the STH Cost Basis, close to the $100,000 level. Therefore, reclaiming this zone is not only a psychological milestone but also a critical condition for any significant shift back to a bullish market structure.

Bitcoin’s Price Recovery Lacks Confirmation

Bitcoin’s recent price action indicates a market still caught in a fragile recovery attempt following a sharp rejection from higher levels. After a failed breakout above the $94,000–$95,000 area, Bitcoin experienced a decisive sell-off that brought the price back toward the $85,000 zone, where buyers stepped in aggressively. This reaction marked a short-term bottom, but the subsequent rebound has yet to demonstrate structural strength.

Currently, Bitcoin is trading near the $90,000–$91,000 region, which has transitioned from a former support level to a key pivot. The price remains below the 200-day and 365-day moving averages, both of which are trending downward and acting as dynamic resistance. The 128-day moving average has also limited recent upside attempts, reinforcing the notion that the broader trend remains corrective rather than impulsively bullish.

The chart reveals a pattern of lower highs since the October peak, indicating that sellers continue to dominate the macro trend. Volume increased notably during the November–December sell-off, while the current bounce is occurring with comparatively lower participation. This divergence suggests that the upward movement may be more driven by short-covering than by robust spot demand. Unless Bitcoin can reclaim and sustain levels above the $94,000–$95,000 resistance zone with increasing volume, the risk of another rejection remains high. Failure to achieve this could reopen the path to the $85,000 support level, where the market would need to demonstrate its underlying strength once again.

From Author

This analysis of Bitcoin’s current market dynamics highlights the complexities and uncertainties faced by traders and investors. The interplay between short-term holders and market resistance levels is critical in determining Bitcoin’s future trajectory. As market sentiment remains divided, it will be essential for participants to stay vigilant and informed about potential price movements.

Impact on the Crypto Market

• Bitcoin’s struggle to maintain the $90,000 level reflects broader uncertainty in the market.
• Short-term holders are experiencing unrealized losses, leading to potential selling pressure.
• The STH MVRV indicator remains below breakeven, indicating a lack of confidence among short-term investors.
• Continued resistance from major moving averages suggests a bearish trend may persist.
• Market participants are closely monitoring the $90,000–$100,000 range for signs of direction.
• A failure to reclaim key resistance levels could trigger further sell-offs and increased volatility.