Bitcoin (BTC) prices are waiting for long-term holders or institutional demand to absorb recent sales pressures from short-term holders, according to the latest Bitfinex Alpha report.
The decline in Bitcoin from an all-time high of $109,590 on January 20th has heightened concerns about the role of institutional investors in maintaining market momentum. The recent pullback below $77,000 has earned a 29.7% retracement from its peak, making it the second deepest revision in the current Bull Cycle.
Historically, a 30% revision has often preceded market rebounds, but current conditions indicate that “deeper self-investrs” have not yet fully absorbed sell-side pressure.
Institutional flows and market stability
Institutional adoption, driven primarily by Spot Bitcoin Exchange Trade Fund (ETF) and corporate accumulation, has played an important role in reducing the depth of retracement in this market cycle.
Past corrections ranged from 18% to 22%, highlighting a shift towards shallower pullbacks.
However, the current 29.7% decline suggests that institutional support has weakened. The report alleges that ETF outflow, which reached $921.4 million in four of last week’s five days, has strengthened this trend.
Without purchases from institutional investors, Bitcoin could face long-term price consolidation or additional downsides.
Amplified sales pressure
Market data shows that short-term holders (STHs) of Bitcoin, defined as wallets that hold BTC for less than 180 days, are increasingly being sold in lost condition.
When the price fell below $90,000, STHS experienced a net unrealized loss.
Particularly vulnerable segments within this group consist of “shrimp” addresses (holders of BTC less than 1).
Recent cost-based trends for Bitcoin buyers further demonstrate weak demand. In a strong market, the cost criteria for those who have acquired BTC within the last 7 to 30 days are usually higher than those who purchased one to three months ago, indicating bullish sentiment.
However, this pattern reversed in the first quarter of 2025, with newcomers reluctant to absorb market supply. This shift coincides with a decline in Bitcoin below $90,000, reflecting the shift from high momentum of all time to a more risk-averse environment.
Important indicators reflect the market s
Short-term holders used the Output Profit Ratio (STH-SOPR). This is an important metric for assessing Bitcoin’s current sales pressure. It measures whether STH sells profits or losses.
Since Bitcoin fell below $95,000, the 30-day moving average for STH-SOPR has remained one consistently, indicating that most short-term investors are losing and selling.
The indicator with 1 as the neutral zone fell to 0.97 when BTC reached $78,000 for a short time. This move marked one of the most sharp surrender events of the cycle.
The sustained downward pressure contributed to broader market attention, leading to continued sales by short-term participants. Historically, such conditions precede the fatigue of local sellers, where weak hands are coming out and strong hands are beginning to accumulate again.
Long-term investors often monitor these conditions for potential re-entry opportunities, and recognize that deep negative STH-SOPR measurements serve as a paradoxical buy signal.
The report stated that as Bitcoin navigates one of the most important retracements of this cycle, institutional investors’ responses are important in determining the next stage of the market movement.
If institutional capital returns with meaningful volumes, it may provide the necessary support for recovery. However, without new interest from deep pocket investors, Bitcoin pricing measures remain curbed and marked on continuous scope-bound transactions or further downsides.
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