Bitcoin has suffered a brutal 29% drawdown over the last 30 days, but a new report from VanEck indicates that the worst of the selling pressure may finally be behind us.
The recent market flush has successfully reset leverage and driven sentiment into "fear" territory.
Resilient on-chain fundamentals and tightening miner supply indicate a much stronger market setup than current prices imply.
"Fear takes over"
Bitcoin’s slide toward the $67,000 level has thoroughly flushed out market speculators. Over the past month, Bitcoin's Net Unrealized Profit/Loss (NUPL) indicator dropped sharply into the "optimism/anxiety" zone, and even briefly breached into pure "fear" during the dramatic price plunge on Feb. 2.
Futures open interest has dropped to its lowest dollar level since September 2024. Yet, despite the pessimism, VanEck points out that network usage remains remarkably robust. Daily transactions, for instance, sit in the 90th percentile of all-time history.
Exhausted sellers
The report confirms that the bulk of the cyclical selling pressure has come from "mid-cycle" holders (investors who acquired their coins between one and five years ago).
Many of these holders likely pulled their sales forward to capitalize on the early 2024 ETF launches and the post-election rally.
However, the data now shows a massive deceleration in distribution.
Over the past month, selling from coins older than one year has fallen significantly. With sellers absorbing roughly $22.5 billion in realized losses over the last 30 days, the lack of continued distribution indicates deep seller exhaustion.
A bottom?
Plunging Bitcoin prices and static electricity costs have severely compressed mining margins. Older machines like the Antminer S19 XP have now become entirely unprofitable for operators paying more than $0.07/kWh.
As a result, the Bitcoin network hash rate has contracted by roughly 14% over the past 90 days.
VanEck notes that sustained 90-day hash rate drawdowns are relatively rare. Historically, these periods of capitulation and network contraction have preceded incredibly strong forward returns for Bitcoin over the subsequent three months.
Vladislav Sopov
Dan Burgin