Bitcoin Faces Resistance After ATH, Raising Liquidity and Market Concerns

•  Long-term holder selling behavior suggests profit-taking and market uncertainty.
• Reduced liquidity and institutional outflows contribute to Bitcoin’s price struggles.

After reaching a record high (ATH) in early 2025, Bitcoin’s price has encountered substantial resistance, signaling a shift in investor sentiment. Investors who were once highly optimistic have become more cautious as the price surged above $100,000 before retreating to below $90,000 by March 2025. This price correction has dramatically changed market sentiment, with increasing uncertainty reflected in key metrics such as open interest and long-term holder (LTH) behavior. These indicators highlight the challenges Bitcoin faces in maintaining momentum post-ATH.

Investor Sentiment: A Shift from Optimism to Caution

The drop in bitcoin prices after ATH clearly shows shifting sentiment. The Bitcoin sentiment vote, which measures market mood, is at levels seen in September 2024, just before the bull run. The fast switch from highly bullish to bearish sentiment is fear and uncertainty. One of the main reasons for this switch is long-term holders selling. Over the 30 days since Bitcoin ATH, more than 89,000 BTC were sold; that’s a lot of profit-taking.

Source: CryptoQuant

In addition, Bitcoin’s open interest, a measure of speculative trading, is down big time from $57 billion at ATH to $24.5 billion. That’s a lot of deleveraging. As more traders unwind their leveraged positions, Bitcoin will be sold down, adding to the pressure on the price.

Institutional Influence and Liquidity Concerns

While retail sentiment has become increasingly bearish, institutional flows play a critical role in Bitcoin’s market dynamics. According to data from CryptoQuant, some institutional investors, such as MicroStrategy, have continued their Bitcoin accumulation despite the recent price corrections. However, Bitcoin ETFs have seen outflows, suggesting that some institutional players are retreating in the short term.

Source: CryptoQuant

Moreover, Bitcoin’s liquidity has been further strained by a significant reduction in “Hot Supply,” or coins held for short periods. This supply has decreased by more than 50% in the past three months, from 5.9% of Bitcoin’s circulating supply to just 2.8%. This sharp reduction in liquidity means fewer newly acquired Bitcoins are being actively traded, leading to reduced market activity. 

Bitcoin Struggles with Key Levels Amid Market Uncertainty

As of the time of writing, Bitcoin is trading at $84,160, marking a modest 0.12% increase in the last 24 hours. The price has fluctuated within a narrow range, encountering resistance at $85,000 and support at $83,000. Bitcoin’s struggle to break through key resistance levels highlights its challenges in regaining upward momentum after its ATH surge. 

Bitcoin 1-Day Price Chart Source: TradingView

The Relative Strength Index (RSI) currently sits at 42.28, suggesting a neutral market position and potential consolidation in the near term. Bitcoin’s price action suggests it is testing the $84,000 support level. Failing to hold above this level could lead to further $83,000 or lower declines. However, if Bitcoin breaks above $85,000, it could signal a potential bullish trend. Its path is unclear as Bitcoin faces increased pressure from reduced liquidity, lower open interest, and institutional outflows. These factors suggest that Bitcoin’s performance may not follow the same patterns as previous halving cycles, potentially resulting in a more unstable and uncertain market outlook.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.