In recent days, Bitcoin melted up, its price rising quickly (and even rather dramatically, at times) into the upper $30,000s.
This price increase has excited quite a few commentators, who seem more inclined to see it as evidence that our current bear market is perhaps nearing its end and that a new bull market may soon be upon us; however, there is a small catch to this vast price increase, and it has to do with the behavior of short-term Bitcoin holders.
Bitcoin’s price may be rebounding, but short-term holders still haven’t returned.
At just 2.53 million, down from 3.06 million in January, trader activity remains low. An uptick here could be an early sign of renewed interest in Bitcoin.
🔗https://t.co/Vtc1OE853A pic.twitter.com/OBF2iwP3n4— IntoTheBlock (@intotheblock) March 24, 2025
As of now, the number of short-term holders has decreased meaningfully, from 3.06 million in January to 2.53 million today. It is quite eerie how our 2.5 million short-term holders right now seems to parallel the number that we had in the bottom of our last bear market in early 2019.
Bitcoin’s price may be rebounding, but short-term holders still haven’t returned.
At just 2.53 million, down from 3.06 million in January, trader activity remains low. An uptick here could be an early sign of renewed interest in Bitcoin.
🔗https://t.co/Vtc1OE853A pic.twitter.com/OBF2iwP3n4— IntoTheBlock (@intotheblock) March 24, 2025
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Bitcoin’s Current Market Activity
Even with the recent price increases, the amount of Bitcoin being sent from one place to another has dropped dramatically over the past month, from $87 billion down to $42 billion. This drop in transfer volume underscores the much lower level of trading activity, which clearly signals that almost all of the investors in this space are simply HODLing. As with lower trading volume in fiat markets, this is a signal of pretty unclear market sentiment.
It is curious that despite the overall transfer volume of Bitcoin decreasing, the actual fees that one has to pay to transact with Bitcoin have been increasing sharply. In fact, over the past week, Bitcoin transaction fees have almost tripled, according to BitInfoCharts. That surge in fees could mean one of two things: either it costs a lot more to use Bitcoin now (which is partially true, and part of what’s driving the price upward), or the surging fees indicate there’s more block space demand, and on-chain activity, happening with Bitcoin now than there was last week.
Investors are intently watching the price changes and network activity of Bitcoin, but it is just as significant to recognize that even though the price of Bitcoin has rebounded, the sentiment from investors is decidedly mixed. The behavior of those who hold Bitcoin for the short term may give us a key indicator of what to expect in terms of future price movements. Historically, the activity of these traders has been linked to sharp price movements—up or down—and they have been a crucial factor in driving the price of Bitcoin.
Key Levels to Watch
With Bitcoin’s price recovery underway, traders and investors are closely tracking essential price levels that might shine a light on the near-term price behavior of the cryptocurrency. The current apparent support level for Bitcoin looks to be right around $82,590 to $85,150, where we see approximately 1.16 million investors having purchased a total of 625,000 BTC. Should Bitcoin’s price happen to dip into this neighborhood, it could potentially see these same investors fronting as the buying interest that’s preventing Bitcoin’s price from going any lower.
Conversely, Bitcoin is contending with resistance that lies between $95,400 and $97,970. At this price point, 1.77 million investors purchased 1.44 million BTC. Should Bitcoin move toward this price point, it could face selling pressure from the same group that drove up the price with their accumulation. Given the nature of the current market as a whole, this makes $95,400 to $97,970 a key range to watch for possible price rejection.
These levels are significant since they show the places where Bitcoin’s price might find support, propelling it higher, or meet up with resistance, which could lead to a pullback. Traders and investors will probably be on the lookout for any signals that suggest price movements might be happening near these important levels as they try to figure out the next step in the market.
Spot ETFs See Massive Inflows
The attention-grabbing Bitcoin market development appears to be the recent influx of funds into Bitcoin spot exchange-traded funds (ETFs). Between March 17 and March 21, Bitcoin spot ETFs had an impressive net inflow of $744 million, marking another major institutional interest signal for Bitcoin. The inflows are even more stunning because they occurred in just a few days, and most of the funds appear to have come from U.S. investors. BlackRock leads the way with its ETF (IBIT), which saw $538 million in net inflows during that same time period. That is such a staggering number for an ETF that BlackRock has filed with the SEC to offer.
From March 17 to March 21, Ethereum spot ETFs saw a total net outflow of $103 million for the week. The largest outflow came from BlackRock’s Ethereum ETF (ETHA), which recorded a net outflow of $74 million.
In contrast, Bitcoin spot ETFs recorded a total weekly net inflow of…— Wu Blockchain (@WuBlockchain) March 24, 2025
The cash flowing into Bitcoin ETFs is a sign that Wall Street is starting to take the leading cryptocurrency more seriously. Making matters even better for Bitcoin, the Bitcoin ETF is a vehicle that can be used by just about any types of investor to get exposure to the asset. Implementing a Bitcoin ETF might, in fact, have much more pronounced effects in the case of institutional investors. If there is institutional demand for the ETF, that could push the price of Bitcoin up. Also, institutions tend to be long-term holders. By implementing a Bitcoin ETF, institutions are also potentially becoming long-term holders of Bitcoin.
Conclusion: A Cautious Optimism in the Market
Though the price of Bitcoin has rebounded, the larger market shows it is still cautious. Recent data show that the activity of short-term holders of Bitcoin has been declining, and this cohort has typically been important for helping set the price. Meanwhile, transfer volume is also down, which might point to an ecosystem that is still nervous.
Nevertheless, from some other perspectives, there is a lot of life in the Bitcoin system. Fees paid for transactions on the Bitcoin network have surged, suggesting that there is real and perhaps unprecedented sustained demand for using Bitcoin.
The Bitcoin short-term price action will be determined by the following key levels:
Support: $82,590 to $85,150
Resistance: $95,400 to $97,970
Key levels to watch for #Bitcoin:
– Support from $82,590 to $85,150, where 1.16 million investors bought 625,000 #BTC.
– Resistance from $95,400 to $97,970, where 1.77 million investors bought 1.44 million $BTC. pic.twitter.com/CPPgKuDfOm— Ali (@ali_charts) March 23, 2025
If the crypto king can find support at these levels coupled with fresh buying from short-term traders, it could be the onset of a more sustained rally. However, a failure at those upper resistances could put BTC back in a wedge it was trying to escape from in the latter half of March.
The market for Bitcoin is as variable as ever, and traders must stay on high alert. Watching not only the technical indicators but also the broader market trends will be crucial for them if they hope to navigate the Bitcoin landscape as it evolves like an erratic cryptocurrency market. An oddly reassuring aspect of the current Bitcoin situation is the institutional inflows; there just doesn’t seem to be much of a way for those to reverse.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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