Bitcoin (BTC) fell below $86,000 on Monday, continuing to widen due to liquidity imbalances as smaller participants continued to buy dips. However, large holders use demand to exit positions, keeping the downward pressure firmly in place.
Key conclusions:
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Retail and mid-sized Bitcoin wallets bought $474 million in cumulative buy-side volume, while whales sold $2.78 billion over the same period.
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Short-term holders of BTC continued to sell at a loss, a sign of capitulation, but a reversal has not been confirmed.
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Bitcoin could retest three-month lows of $80,600 after reversing its short-term bullish trend.
Whales dominate the sell side while retail bets on the bottom
Order progress data from Hyblock Capital highlighted sharp difference in behavior between classes of participants. Retail traders or wallets ($0-10,000) accumulated a cumulative volume delta of $169 million, consistently bidding down the downtrend. Mid-sized participants ($1,000-$100,000) also built a net spot position of $305 million as they sought to advance the recovery.
However, whale wallets ($100,000 – $10 million) remain the dominant force, with a negative $2.78 billion cumulative delta volume. The combined purchasing power of retailers and mid-sized retailers is insufficient to absorb distribution at the institutional level.
This results in a liquidity mismatch where smaller players interpret prices below $100,000 as a discount, while large holders treat the same zone as an opportunity to reduce exposure.
Meanwhile, onchain analyst Axel Adler Jr pointed to the Short-Term Owner’s Earnings Ratio (7-day SMA) which has slipped below 1, currently hovering near 0.99. This showed that coins held for less than 155 days are sold at a loss on average.
Historically, such conditions have aligned with local capitulation phases, when selling pressure is at its peak. However, Adler emphasized that stress alone is not a signal for reversal. A sustained recovery can begin once the SOPR returns and holds above 1, confirming that demand has begun to absorb supply.
Related: Bitcoin Sees ‘Sheer Manipulation’ As US Selloff Liquidates $200M In Hour
Bitcoin is open to reconsidering lower liquidity targets
From a technical point of view, the structure of Bitcoin has weakened further. BTC price broke out of the rising wedge pattern, confounding the monthly VWAP (volume weighted average price) before printing a bearish bearish structure (BOS) below $87,600.
With the reversal of the short-term bullish trend, BTC now faces downside targets near the previous pools of liquidity or external liquidity.
Immediate targets remain the swing low of $83,800, with a deeper retracement to the three-month lows of $80,600 possible if selling pressure continues. For now, both order flow and onchain signals suggest that patience is needed before a permanent bottom is declared.
Related: Falling Bitcoin Parabola Increases Chances of 80% Correction: Veteran Trader
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision. Although we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph shall not be liable for any loss or damage arising from your reliance on this information.
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