Executive Summary

Bitcoin has struggled to overcome key cost basis levels, signaling softening demand and increased selling pressure from long-term holders. While volatility has cooled and options markets are relatively balanced, the market is now heavily dependent on upcoming Federal Reserve decisions. Any hawkish surprises could reignite volatility.

Key Takeaways:

• Rebound Patterns: Bitcoin rebounded from $107K-$118K after a brief dip, but sustained selling pressure from long-term holders is limiting gains.
• Critical Support Levels: Bitcoin struggles to stay above the short-term holder cost basis (around $113K), a crucial level for market direction.
• Short-Term Holder Pressure: Short-term holders are exiting at a loss, while long-term holders remain heavy sellers (-10.4K BTC/month).
• Market Volatility: Implied volatility has dropped sharply, but remains sensitive to upcoming Federal Reserve decisions.

Detailed Analysis

Familiar Rebound Patterns: Bitcoin staged a brief recovery after dipping into the $107K-$118K zone, but the rally was short-lived due to continued selling pressure.

Struggling to Hold Support Levels: After the rebound, Bitcoin briefly recovered the $113K level near the short-term holder cost basis, but the failure to maintain this level signals weakening demand.

Short-Term Holder Pressure: Further market weakness may come from short-term holders now selling at a loss. The short-term holder net unrealized profit/loss metric suggests the market is in a delicate balance.

Long-Term Holder Selling: Continued selling by long-term holders continues to weigh on market structure, with the long-term holder net position change dropping to -10.4K BTC/month.

Options Market Volatility: Implied volatility has decreased, and skews have become more muted, suggesting a more stable market. However, this calm is dependent on upcoming Federal Reserve decisions.

Conclusion: The current state of the Bitcoin market indicates a market in correction and recalibration. Bitcoin's failure to maintain key support levels and continued pressure from both short-term and long-term investors highlight the need for an extended period of consolidation to restore confidence. Any unexpected shifts from the Federal Reserve could trigger further volatility.