Bitcoin Bottom Doubted as Whales Sell, Sentiment Sours

The most alarming signal comes from Bitcoin’s largest holders, with whale wallets containing between 10 and 10,000 BTC reducing their holdings for six straight weeks according to Santiment and CryptoQuant data. This represents a significant reversal from the accumulation patterns seen through early October and suggests institutional and large-scale investors are taking profits or cutting losses. The sustained selling pressure from these key market participants creates substantial headwinds for any sustained recovery attempt.

Complementing the whale exodus are Bitcoin’s negative MVRV ratios, which measure unrealized profit and loss across the network. Both the 30-day and 365-day MVRV ratios remain in negative territory, indicating that the majority of traders are currently holding positions at a loss. This metric, when combined with the whale selling activity, paints a picture of a market under significant pressure despite Bitcoin’s recent bounce from $80,000 to current levels around $87,500.

Technical analysts are sounding alarms about key support levels that could trigger further declines. Analyst ‘Brett’ observed that Bitcoin has never made a new all-time high after closing below the 50-week moving average without first touching the 200-week moving average. With the 50-week MA already crossed and the 100-week MA currently acting as support, a break below this level could see Bitcoin testing the 200-week simple moving average, which TradingView data places at $56,000.

Swissblock analysts noted that while Bitcoin bounced to $89,000, momentum remains deeply negative at levels typical of late-stage capitulation. They emphasized that until momentum indicators turn positive, every bounce should be viewed as a tactical reaction rather than a sustainable recovery. This assessment aligns with the broader technical picture that suggests the market hasn’t yet found solid footing for a sustained upward move.

Adding to the technical concerns, analyst James Check identified remaining leverage in the system that may need to be flushed out, cautioning that BTC could wick down into the $70,000 to $80,000 range to eliminate final leverage pockets. This potential move would represent another significant test for Bitcoin bulls and could determine whether the current consolidation represents a bottom or merely a pause before further declines.

Social media sentiment has turned notably bearish according to Santiment analysts, with increased declarations of a bear market emerging across cryptocurrency discussion platforms. However, historical patterns show that major market turnarounds often occur when retail hope is lost, as markets frequently move opposite to crowd expectations. This contrarian indicator suggests that the current pessimism could potentially set the stage for an unexpected reversal, though timing remains uncertain.

Despite the overwhelming bearish signals, some analysts see potential for short-term relief. Santiment’s assessment points to the most likely scenario being a short-term bounce, with a rebound above $90,000 not being a major surprise. This temporary recovery potential exists alongside the broader negative outlook, creating a complex trading environment where tactical opportunities may emerge even within a deteriorating longer-term trend.

The derivatives market adds another layer to the sentiment picture, with speculators beginning to short Bitcoin again, though not at the volumes seen in mid-October. This cautious bearish positioning, combined with declining network activity and reduced active addresses, suggests the market remains in a fragile state where any negative catalyst could trigger another leg down, while positive developments might fuel a more substantial short-covering rally.