Bitcoin (BTC) Trapped Below $90,000: Weaker Demand and Profit-Taking to Blame

Key Takeaways

• The Bitcoin Long-Term Holder SOPR has risen to 2.28, indicating that long-term investors are selling at a profit.
• Bitcoin’s Open Interest has dropped from over $37 billion to $23.56 billion, contributing to the downside pressure.
• The Supertrend indicator has flipped bearish, with resistance at $86,461, indicating a further BTC price decline.
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Not so long ago, Bitcoin’s (BTC) price got very close to hitting $110,000. Many analysts even predicted a bigger picture, with some saying BTC could hit $150,000.

A few months later, the flagship cryptocurrency is struggling to retain the pace it displayed toward the end of 2024 and earlier this year.

Rising bearish sentiment and gloomy macroeconomic factors are behind this mesmerizing decline. But beyond these, CCN observes that several other factors have kept Bitcoin’s price suppressed.

From our findings, it does not appear that the coin might experience respite soon. Here is why.

Bitcoin Faces Renewed Uncertainty

After falling below $80,000 on Tuesday, March 11, Bitcoin price recovered and climbed past $86,000 on Wednesday. This quick recovery rekindled hopes that the cryptocurrency might refrain from trading lower in the short term.

But all hopes were dashed later, as BTC now wobbles around $84,277. This decline was due to several factors.

However, the most notable is the profit taken by long-term holders. According to CryptoQuant data, the Bitcoin long-term holder Spent Output Profit Ratio (SOPR) has risen to 2.28.

The Long-Term Holder Spent Output Profit Ratio (SOPR) tracks the movement of coins held for over 155 days, helping to determine whether holders are selling at a profit or loss.

A SOPR value above 1 suggests that holders are selling at a profit. However, a value below 1 indicates realized losses, indicating potential capitulation.

Following Bitcoin’s rebound above $86,000 mid-week, it appears that long-term holders seized the opportunity to take profits. If this trend persists, BTC could face intensified selling pressure, making breaking past the $90,000 resistance difficult.

Open Interest Drops By 35%

By extension, Bitcoin’s Open Interest (OI) has also contributed to the recent price action. The OI is the value of the sum of all open contracts in the derivatives market.

When it increases, it indicates rising speculative activity, which most times positively impacts Bitcoin’s price. According to Santiment, Bitcoin’s OI, over $37 billion in December 2024, dropped to $23.56 billion.

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This 35% decline indicates decreasing exposure to the cryptocurrency, with traders lowering demand for BTC contracts. Should the value continue to slide, Bitcoin’s price might follow the same direction.

Analysts Predict Sideways Movement

Concerning BTC’s price, CryptoQuant recently noted that the coin might experience a prolonged downturn. It was mentioned after examining the Bull Score Index, which ranges from 0 to 100.

When the index is below 40, it indicates a bearish market. But when it is above 60, it signifies a bullish phase.

As of this writing, the Bull Score Index is 20. Thus, CryptoQuant noted that Bitcoin’s price might struggle to recover if it remains the same.

“Currently, the index stands at 20—the lowest since January 2023—market conditions are weak, raising concerns that the recent price drop could be part of a broader bearish trend rather than a short-term correction,” The analytic platform highlighted in its report released March 20.

For analyst Michaël van de Poppe, BTC price action might remain boring. According to him, while the price may hold at $82,000, he does not expect an exponential rally in the short term.

“Still boredom on the Bitcoin markets. I expect that we’ll hold above $82K and have another higher low. Ultimately, range-bound and no real acceleration,” van de Poppe stated .

BTC Price Analysis: Bearish Setup Sustained

From a technical perspective, the daily chart shows the red line of the Supertrend indicator, which has risen above Bitcoin’s price.  The Supertrend indicator measures trend direction while spotting support and resistance.

When the green line of the indicator is below the price, the trend is bullish. However, in this case, the position of the indicator indicates resistance around $86,461.

Should this remain the same, Bitcoin’s price might decline to $79,280. The coin’s value could drop to $72,180 in a highly bearish scenario.

On the flip side, this decline might not happen if buying pressure increases.

In that scenario, BTC could climb to $96,490.