Bitcoin price loses weekly gains to under 0.5% amid realized cap slowdown
Bitcoin's recent price drop suggests a shift in market dynamics, raising concerns about its ability to maintain earlier gains. An analysis of capital inflows, technical indicators, and key price levels offers insights into the cryptocurrency’s current trajectory.
The Bitcoin Realized Cap, a measure of the cumulative capital invested in Bitcoin, experienced significant growth in the final months of 2024. Monthly percentage changes in the metric surged to notable highs, reflecting rapid inflows that supported Bitcoin’s climb past $100,000. However, this trend reversed toward the end of the year, with the 30-day change in the Realized Cap declining sharply. While the metric’s value remains positive, indicating ongoing growth, the slower pace suggests reduced momentum in the market.
BTC price dynamics (April 2023-January 2025). Source: Glassnode.
Bitcoin price analysis: 100k level pivot to determine price near-term trajectory
Price action data on January 23, during the Asian session, reflected a 2% decline in Bitcoin, dropping below the 50 EMA on the 4-hour chart to $101,680. By the European session, the price had slightly recovered to $102,700. This represents a 4.5% drop from Wednesday's levels, paring Bitcoin’s weekly gains to less than 0.5%. The sharp decline underscores a shift in market sentiment, with traders now leaning toward caution as they assess the next key moves.
Despite the ongoing growth in the Realized Cap, the declining rate of inflows and recent price retracements highlight a cooling off in market enthusiasm. The $100,000 level, a pivotal support zone, has historically acted as a psychological and technical floor. Any further retracement below this level could trigger increased selling pressure and a deeper correction. While a sustained hold above this level could renew bullish confidence. As market conditions evolve, traders should remain alert to changes in both technical and fundamental indicators.
The Short-Term Holder Spent Output Profit Ratio (STH SOPR) indicated STHs were realizing losses. Bitcoin traded at $105,500 in the early European session, just 3.7% below its all-time high of $109,400.
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