Bitcoin (BTC) has undergone its second-largest correction of this bull run, according to analysts at crypto exchange Bitfinex. The correction, from the coin’s all-time high of $109,590 set on Jan. 20 to a low of $77,041 during the week of March 9-15, represents a 30% retracement triggered by selling pressure from short-term holders.

In its report, Bitfinex defines short-term holders as those who have bought within the last seven to 30 days. According to the exchange, they have suffered net unrealized losses and are often more subject to capitulation.

Bitfinex notes that ongoing outflows from Bitcoin ETFs, which totaled around $920 million during the week of March 9-15, suggest that institutional buyers have not yet returned with enough strength to combat selling pressure.

Bitcoin capital flow by short-term holders. Source: Glassnode/Bitfinex

Trading at around $84,357, Bitcoin has rebounded 9.5% from its low. According to Bitfinex, a key factor moving forward will be whether institutional demand picks up at these lower levels, potentially leading to supply absorption and price stabilization.

“While institutional flows and the macro situation is pivotal for market direction in the mid-term, statistically, a 30 percent drawdown has often marked the low before continuation higher,” Bitfinex analysts told Cointelegraph. “If Bitcoin stabilizes around this level, history suggests a strong recovery could follow.”

Bitcoin ETPs see $5.4B in outflows over five weeks

Weekly outflows from crypto exchange-traded products (ETPs) have reached a streak of five weeks, totaling $6.4 billion as of March 14. According to data from CoinShares, Bitcoin ETPs have borne the brunt of outflows, with $5.4 billion in losses.

The current macroeconomic climate may be weighing on the markets, according to Bitfinex. US consumer confidence has fallen to its lowest level in two years, and there are expectations of higher inflation along with economic uncertainty. On March 4, a Federal Reserve’s model predicted that the US economy would shrink by 2.8% in the first quarter of 2025.

Meanwhile, talks of trade wars continue to dominate the news, putting Bitcoin’s status as a safe-haven asset in doubt, keeping miners on their toes, and perhaps putting the bull market in peril — despite the White House’s recent announcement of a US Bitcoin strategic reserve and digital asset stockpile.

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