Bitcoin (BTC) Price Action Fuels Divide Between Long-Term Holders and Short-Term Speculators

Bitcoin's price action is fueling a divide between long-term holders and short-term speculators. As panic sellers offload their holdings

Bitcoin’s price action is fueling a divide between long-term holders and short-term speculators. As panic sellers offload their holdings, large investors on Bitfinex are doubling down on leveraged longs, signaling confidence in the asset’s long-term potential.

On-chain data shows speculators suffered over $100 million in realized losses in the past six weeks, according to CryptoQuant. Short-term holders—those who acquired BTC in the last one to three months—were hit hardest, capitulating as Bitcoin corrected 30% from its mid-January peak.

“This represents a reduction in the value of Bitcoin held by this cohort, who are now underwater as many bought at higher prices and are exiting with losses,” CryptoQuant contributor Onchained wrote on Monday.

The market capitalization of these holdings has now dropped below their realized capitalization, signaling that these investors are actively selling at a loss. This selling pressure could weigh on Bitcoin’s short-term price trajectory.

At the same time, large investors on Bitfinex are positioning for further gains with leveraged longs. After hitting lows of 30,000 BTC in early March, margin longs have surged by 13,787 BTC to reach 63,787 BTC, marking the highest level since November 2024.

This surge in leveraged positions showcases the optimism among institutional traders, who are anticipating a breakout from the recent trading range.

Moreover, Bitcoin’s correlation with global liquidity trends suggests the asset could be poised for significant gains in the coming months.

Pakpakchicken, a pseudonymous trader on X, claims to have identified an 82% correlation between Bitcoin’s price and the global money supply (M2). Historically, BTC has surged when central banks ease monetary policy, increasing liquidity in the market.

“Periods of monetary easing tend to fuel greater investor interest in the asset, increasing its price potential,” the trader noted.

With global recession risks rising, central banks may be forced to expand M2 to stimulate economic growth. If this trend holds, Bitcoin could benefit from a fresh wave of liquidity, potentially pushing its price toward $105,000 in the coming months.

However, if Trump’s administration pulls back on crypto support or Saylor faces difficulties selling Strategy’s BTC holdings, it could hamper Bitcoin’s recovery potential.

Finally, Bitcoin’s weekly chart is approaching a key support level at $74,000, according to crypto analyst Ali Martinez.

“Watch $74,000 closely! The weekly chart hints at a potential trend shift if Bitcoin loses this key support.”

If BTC fails to hold this level, it could trigger further liquidations from leveraged traders, amplifying downside risk. Conversely, a strong bounce could reaffirm bullish momentum, setting the stage for a push toward $100,000.