Bitcoin (BTC) Navigates a Crucial Period in March 2025, Short-Term Holders Face Losses

Bitcoin, the leader of the cryptocurrency market, is currently navigating a crucial period in March 2025. Its price movements have begun to reflect patterns similar to previous cycles

Bitcoin (BTC) is navigating a crucial period in March 2025, with its price movements beginning to reflect patterns observed during previous cycles.

Following a downturn from the August 2024 high, which saw a steeper decline compared to the 2021 market crash, Bitcoin’s price has stabilised. However, this recovery has brought short-term holders into a precarious position, with many now facing losses as the market continues to fluctuate.

Short-Term Holders Still in the Red

Examining the Short-Term Holder (STH) Realized Price, we can see that those who bought during the last cycle at prices above $90,000 are now encountering a similar level of losses to what was seen in August 2024.

This trend is evident as the STH Realized Price, a key indicator, currently stands at $92,780. In contrast, the price at which the coins were last accumulated is $84,000, indicating a disparity of $8,780. This difference suggests that many short-term holders are still “underwater” and realizing losses.

Chart of the STH Realized Price and the last price at which coins were accumulated closely follows the MVRV ratio in market cycles.

When considering the Market Value to Realized Value (MVRV) ratio in addition to the STH Realized Price, we gain a deeper understanding of the market’s present structure.

Typically, the MVRV ratio is used to determine if Bitcoin is overvalued or undervalued. A ratio above 2.0 suggests overvaluation, often observed before market corrections. At the time of writing, the MVRV stands at 1.5, a level that might indicate an approach to an accumulation phase rather than overbought conditions.

Chart of the MVRV ratio highlighting the typical overvalued and undervalued zones.

If Bitcoin manages to break through the resistance at $92,780, it could signal a return of bullish momentum. Surpassing this level could pave the way for a test of the $100,000 mark.

However, if Bitcoin fails to maintain support above the $80,000 level, the market could face increased selling pressure, possibly leading to a retest of the $70,000 range.

Interestingly, similar patterns have been observed during past market cycles. For instance, in mid-2024, when Bitcoin reached $100,000, there was a sharp pullback to $70,000, followed by a significant rebound.

If this historical trend continues, we might witness another correction before a recovery towards the $100,000 level.

Bitcoin Liquidity and Supply Dynamics

Examining the 5-10 year cohort of Bitcoin supply, we can see that it peaked at 8 million BTC in 2021, but has since been decreasing.

As of early 2025, the 6-12 month supply band stabilized at 3 million BTC, showing that a significant portion of Bitcoin is now held by long-term investors.

This shift in supply dynamics could play a role in future price movements, as long-term holders are less likely to sell during a market correction.

The younger supply bands, which saw increased activity during the 2024 rally to $100,000, may see renewed movement if Bitcoin surpasses $100,000 again. Conversely, prolonged price suppression below $80,000 could lead to further aging of Bitcoin’s supply, extending bearish conditions.

Market Sentiment and Newcomer Behavior

Current market sentiment, analyzed through the MVRV ratio, suggests a cautious outlook.

With Bitcoin’s MVRV at 1.5 and short-term holders still in the red, many newcomers who bought at inflated prices around $95,000 may be reconsidering their positions, especially as the price continues to test support levels.

New traders, often influenced by media hype and speculation, are becoming more focused on short-term trends over long-term value, which could induce market turbulence.

As Bitcoin struggles to maintain its upward momentum, the market could face increased volatility, particularly if the MVRV drops closer to 1.0, signaling a deeper decline and potentially a revisit of the $70,000 level.