Bitcoin Price Enters Speculative Phase as Crypto Market Slides Into Fear Territory

Onchain analysts have identified that the Bitcoin price is now in its speculative phase following its recent performance. DeFi platform xWIN Finance shared this in its latest research via Cryptoquant.

According to the firm, new whales have taken control of the Bitcoin market from the long-term holders. This opens up the market to potential expansion.

Bitcoin Price Now in Later Stage of Bull Cycle

The researchers noted that Bitcoin is already in the late stage of this bull cycle, citing the NUPL (Net Unrealized Profit/Loss) and Realized Cap composition.

According to the report, NUPL is currently at 0.52, which historically marks the point when the market shifts from optimism to euphoria. Similar to previous bull cycles such as 2017 and 2021, the majority are already in profit.

It said:

This is a positive development that shows market confidence. However, the analysts noted that it also means that BTC might not have much room to run within consolidation.

Interestingly, short-term holders (STH) now account for 44% of  BTC realized capitalization, the highest level ever. This is a signal that the long-term holders (LTH) are taking advantage of the Bitcoin price to realize profit.

While this is generally a sign of a potential market top, the experts believe this time might be different. They observed:

Nevertheless, it is too early to tell which direction the market will go. They noted that the key signal would be whether STH share declines, which would mean LTH has resumed accumulation.

Crypto Market Falls into Fear Territory

Meanwhile, the Crypto Fear & Greed Index has now fallen to 37, signaling Fear among the majority of investors. The index dropped into the Fear Zone after the record liquidations and crypto crash on Friday, but soon recovered to neutral territory.

However, the volatile market performance, which has seen the Bitcoin price oscillate over the past few days, is impacting crowd sentiment. BTC fell as low as $104,000 while also rising to $115,000 in the last five days.

While it is currently trading above $112,000, analysts note that it is now below its short-term cost basis of $115,000. Its ability to break above this level will determine if bullish momentum returns.

However, that could prove difficult given that STH is panic-selling at a loss. Onchain data shows that STH sent 56,000 BTC to exchanges on Tuesday at a loss. It is unclear why they are doing so, but it shows that short-term demand for BTC is weak.

Despite the sustained sell-offs of recent days, there are still positive signs. Glassnode analysts noted that the Bitcoin options market shows a concentration of net premium between $115,000 – $130,000. This is a signal that traders see potential upside.