Bitcoin's drawdown continues as on-chain signals send conflicting messages

According to data from CryptoQuant, Bitcoin is currently experiencing a significant decline, with a drop of up to 24% from its recent high – one of the heaviest drawdowns in the current cycle. This situation reflects deep uncertainty in the market as investors reconsider their strategies.

On-chain indicators depict a mixed picture

Two key on-chain indicators show clear differences. The Short-Term Holder (STH) MVRV index has entered the trading zone between 1.0 and 1.15 – a historically meaningful level as it often signals accumulation phases or local bottoms. This is an encouraging sign for those seeking buying opportunities.

However, the other side of the picture is less optimistic. Long-term holders have been continuously selling over the past thirty days, reflecting caution and possibly exerting selling pressure on the price. This behavior can be interpreted as a sign of apprehension or a strategic stop-loss move by veteran investors.

Recovery outlook depends on key factors

Analysis indicates that although the current price seems attractive to those looking for good entry points, the ongoing net selling volume from long-term holders could negatively impact the speed of recovery. If important support levels are maintained and selling pressure is alleviated, a solid foundation for the next bullish cycle could form.

Conversely, if continued selling or deeper drawdowns persist, the market may experience more complex developments. The balance between these on-chain indicators will be the key to determining Bitcoin’s next move.