Bitcoin Trapped in Range at $65K: Are Long-Term Holders Finally Giving In?

Bitcoin's price remains within a stable range, avoiding a drastic sell-off even amidst monthly declines and geopolitical uncertainties.

Key Takeaways

Bitcoin's price remains relatively stable, fluctuating around $65,000.
Recent trading patterns show a tendency to drop heading into weekends and recover as the week starts.
Long-term holders are experiencing a decline in profits, signifying potentially bearish market sentiment.
Complicated macroeconomic conditions and geopolitical tensions continue to influence Bitcoin's market behavior.
The current market phase could suggest an eventual stabilization following a period of selling pressure.

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Bitcoin Stays Rangebound

As reported by QCP Market Colour on March 30th, Bitcoin briefly dipped to around $65,000 during a period of low trading activity in Asia. This low liquidity often causes price movements to be exaggerated. However, Bitcoin quickly rebounded, settling back into its typical weekend trading range of between $66,000 and $67,000.

This pattern has repeated throughout the month: prices tend to drop heading into the weekend as traders reduce their risk, then gradually rise again as a new week begins. Bitcoin is expected to remain in this range as former President Trump's 10-day halt on strikes against Iranian energy assets nears expiration on April 6, prompting traders to prepare for possible escalations.

In the options market, post-expiry volatility compression is subdued; traders are still focusing on "gamma" trades, while those who might write options are keeping their distance. The volatility indicators suggest a market that is cautious rather than alarmed. Current positioning reflects a defensive mindset, aligning with a stable market that isn’t ready to climb higher yet.

Indicators suggest Bitcoin could see its sixth consecutive negative monthly close and its first three-month losing streak early this year, pointing to ongoing fragility in market sentiment. According to QCP, “Washington is suggesting an escalation risk.” While the U.S. claims progress is being made in negotiations, the ongoing troop buildup suggests preparations for potential ground operations. Simultaneously, Iran's allies in Yemen have warned that they might disrupt crucial supply lines if tensions escalate.

A blockade in the Bab al-Mandeb Strait could significantly exacerbate the inflation crisis, a situation that is particularly concerning for the administration as election season approaches with low approval ratings.

The macroeconomic landscape and geopolitical factors are closely linked. High oil prices, the risk of war, and supply chain issues maintain the narrative of stagflation, complicating Bitcoin’s role as both a high-risk asset and a potential macro hedge. If Trump's pause on strikes remains intact and no unexpected policy changes arise, Bitcoin will likely continue to be influenced by ongoing headlines as April unfolds.

On the blockchain, this volatile situation is mirrored by Long-Term Holder SOPR (Spent Output Profit Ratio), which has recently dipped below 1.0, according to data from Crypto Dan via Crypto Quant. Experienced holders appear to be selling at a loss, signifying classic “surrender” or early capitulation patterns.

Typically, long-term holders are less susceptible to short-term price fluctuations. When they begin to realize losses, it often indicates that the overall market is nearing a capitulation phase.

Bitcoin

Crypto Dan notes that such conditions have historically preceded phases where selling pressure diminishes, laying the groundwork for market bottoms or levels close to long-term lows. While it may be premature to label this as the definitive bottom, a period where losses are widely felt often marks the conclusion of fear and opens a genuine opportunity for patient buyers.

In summary, the combination of stagnant prices, cautious trading options, and stress among long-term holders indicates we are in the final stages of a correction phase. While the market remains under pressure, it is edging closer to stabilizing rather than entering a vigorous new bullish uptrend.

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Cover image from Perplexity, BTCUSDT chart from Tradingview