This is the stage where the market descends further into fear and confidence begins to give way to capitulation.
More extensive settings and Bitcoin ($BTC) Recent backlash, this move is noteworthy. On the macro front, after weeks of relative calm, US President Donald Trump recently directed the US military to prepare for the possibility of a full-scale attack on Iran. This gave oil prices, already rising, momentum towards $110 per barrel.
In the case of Bitcoin, this is happening at the edge of the cycle. As the graph shows, $BTC For now, it has been rejected on a cost basis by short-term holders, hovering around $81,000. At the same time, the STH MVRV ratio, which had reached the 1.0 level (basically the break-even point for short-term holders), has rolled over from that zone.
Taken together, this setup suggests that short-term holders are exiting fairly aggressively for now.
Adding to the weakness, Bitcoin ETFs began the new week with nearly $650 million in net outflows, extending last week’s more than $1 billion in redemptions. However, this time the selling pressure is more widespread, according to CoinMarketCap. ARKB and IBIT are tied for the largest amount of outflows, each recording around $310 million to $324 million. In contrast, January’s wave of redemptions relied heavily on IBIT alone.
From an institutional perspective, this is indicative of deep anxiety spreading across major corporations, and a growing risk-off trend in the market. Meanwhile, Santiment noted that there has been an increase in FUD surrounding Bitcoin across social media platforms recently. Essentially, macro FUD now appears to be moving from conviction to early capitulation, raising the question: “Is Bitcoin’s recent correction the beginning of a deeper unwind?”
This divergence in Bitcoin is becoming even more pronounced.
Increased market anxiety can cause investors to either panic and sell or step up to buy FUD.
Looking at Bitcoin ETFs, the first scenario is currently playing out more strongly. Typically, during periods of “extreme” fear, heavyweight players absorb excess liquidity and reduce liquidity. $BTC Consolidate supply and prepare for a rebound if sentiment returns to risk-on.
The key word here is “excess.” As the chart below shows, Bitcoin’s Fear and Greed Index recently returned from the fear zone to neutral territory, marking its second recovery in Q2. The first event occurred from late April to early May. $BTC It was on the market for about $75,000. This rebound ultimately pushed sentiment above 50, coinciding with Bitcoin’s breakout above $82,000. This shows that the fear has not actually reached an “excessive” level.
In this context, this setup suggests that Bitcoin is not yet in a full capitulation stage.
If anything, recent short-term holder selling and ETF outflows look more like repositioning than panic exits, although overall sentiment remains fairly positive. So far, macro FUD hasn’t fully factored into investor decision-making, so this move looks more like a short-term rotation than a deeper breakdown, even though ETFs are still bleeding.
This is a strong signal to follow closely for the remainder of the second quarter.
Final summary
- Bitcoin is showing increased short-term anxiety, but sentiment has not completely collapsed yet, suggesting more potential for rotation than capitulation.
- Fears never reached “excessive” levels, so this looks like a correction phase worth watching for in Q2 rather than a more severe crash.
