Bitcoin Slips to $63,000 as Macro Risk Aversion and Long-Term Holder Capitulation Cap Recovery

Bitcoin is testing key support levels as global markets experience a shift away from high-beta assets. On Friday, the world’s largest cryptocurrency was trading at approximately $63,020, representing a 1.7% decline over the past 24 hours. This downward drift places the asset roughly 50% below its record high of $126,080 established in October, according to data from CoinGecko. The latest slide follows a failed attempt to sustain momentum above $65,000 on Wednesday, with the price eventually slipping to an intraday low of $62,640.

This downward move pushed Bitcoin below a critical technical threshold: the “$64,500 Put Wall.” In the derivatives market, a put wall represents a heavy concentration of open interest in put options at a specific strike price. Market makers who sell these options typically hedge their exposure by buying the underlying asset as the price nears the strike, creating a temporary floor. Tim Sun, senior researcher at Hashkey, told Decrypt that this concentration of put open interest had served as “short-term support” before sellers ultimately broke through it ahead of this week’s options expiry.

The breakdown comes amid a broader cooling of global risk assets. Sun noted that risk appetite across traditional financial markets has “cooled down significantly,” characterized by corrections in global equities and an accelerating deleveraging trend in high-flying semiconductor and artificial intelligence (AI) sectors. This macro-driven retreat has prompted institutional investors to trim their exposure to digital assets. However, Sun emphasized that the derivatives market remains relatively healthy, showing no leverage-related crowding, which indicates that the current selling pressure is primarily concentrated in the spot market rather than being driven by cascading liquidations.

Daniela Hathorn, senior market analyst at Capital.com, shared a similar perspective, characterizing the recent price action as a broader bout of risk aversion rather than a reflection of deteriorating crypto-specific fundamentals. She noted that Bitcoin has become increasingly sensitive to the macro environment, with shifting interest rate expectations, geopolitical uncertainties, and broader market sentiment dictating short-term price movements. While the overnight price action appears negative, Hathorn suggested that the underlying market dynamics present “slightly conflicting signals,” hinting that the broader macro picture may be less bearish than the headline numbers imply.

On-chain data reveals that the most persistent headwinds are coming from within the network itself. According to analytics firm Glassnode, more than 65% of the coins moving onto exchanges are associated with long-term holders realizing losses. In on-chain analysis, long-term holders (LTHs) are typically defined as entities holding coins for more than 155 days—a cohort historically less prone to panic selling. Glassnode observed that this current pattern mirrors previous bear-market phases, during which this specific group “dominated the sell side before eventually exhausting.” The firm warned that until this percentage declines, the structural sell pressure from cycle-top buyers remains the dominant force in exchange flow.

Sun pointed to similar trends on-chain, observing that investors who acquired their positions one to two years ago are “gradually accepting losses and exiting.” This steady stream of distribution has effectively capped Bitcoin’s attempts to rally, preventing a sustained recovery even after recent encouraging U.S. inflation data provided a temporary boost to macro sentiment.

The launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. earlier this year was expected to provide a permanent institutional bid, but current market demand has yet to establish a firm price floor. After experiencing a substantial $425 million outflow on Monday, U.S. spot ETFs recorded net inflows of $181 million on Tuesday and $108 million on Wednesday, according to data from Farside Investors. Sun described this turnaround as a marginal recovery that was ultimately insufficient to reverse the market’s downward momentum. Since their inception in early 2024, these investment vehicles have accumulated approximately $51 billion in cumulative net inflows.

Despite the muted immediate price response, Hathorn viewed the return of positive ETF flows constructively. She suggested that the transition back to net inflows after a period of sustained redemptions indicates that “longer-term investors are gradually returning to the market,” signaling a potential stabilization in institutional demand.

There are tentative indications that the worst of the selling pressure may be behind us. Sun noted that the liquidation intensity of long-term holders may have begun to peak, as evidenced by a gradual decline in on-chain realized losses. Glassnode highlighted analysis from CryptoVizart, who noted that crypto bear markets rarely establish a “durable footing” until the one-to-two-year holder cohort completely exhausts its selling pressure. Barring any unexpected macroeconomic disruptions or “a larger external shock,” Sun believes the downside remains limited, suggesting that the combination of diminishing sell pressure and clean leverage could pave the way for a choppy bottom as the market consolidates.