Bitcoin Market Panic as Short-Term Holders React to Recent Drop

Bitcoin is approaching the $78K-$80.7K CME gap after a 12% weekly drop. A new gap at $92.7K-$94K hints at a relief rally to $93.5K. With short-term holders panic selling and volatility surging, BTC’s next move remains uncertain.

Zagham Abbas
February 27, 2025
2:17 pm

Zagham Abbas

Zagham is a renowned crypto journalist known for his insightful analysis and in-depth reporting on the cryptocurrency industry.

Bitcoin approaches the $78K-$80.7K CME gap, a historically significant level.
BTC has dropped 12% in a week, causing panic selling among short-term holders.
A new CME gap at $92.7K-$94K suggests a potential relief rally to $93.5K.

Bitcoin (BTC) recently faces significant volatily and experienced huge decline in it’s value. Over the past week, BTC is down by almost 12% showing trublance market condition. BTC hit it’s recent low at $82,000 and bounced from this level quickly.

At the time of writing, Bitcoin is trading at $86,710, with a 24-hour trading volume of $130.88 billion and a market capitalization of $1.72 trillion. The price has dipped 2.19% in the last 24 hours, indicating continued uncertainty.

CME Gaps and Bitcoin Market Predictions

Crypto analyst Rekt Capital has pointed out that Bitcoin is nearing the completion of a CME Gap that emerged between $78,000 and $80,700 in November 2024. CME Gaps occur when BTC’s price moves sharply outside market hours, creating unfilled spaces in the futures market. Historically, Bitcoin revisits these levels to “fill the gaps.”

#BTC

Bitcoin is getting closer to filling the CME Gap that created between $78000 and ~$80700 in November 2024

On this retrace however, Bitcoin has developed a brand new CME Gap between ~$92700 and ~$94000

That new CME Gap is confluent with the Re-Accumulation Range Low… https://t.co/lDWd6C8nHf pic.twitter.com/8Q58b67uI3
— Rekt Capital (@rektcapital) February 26, 2025

However, Bitcoin opened a new CME Gap at $92,700-$94,000 in this latest pullback. The gap is at a crucial level of a Re-Accumulation Range Low, which makes a likely revisit at $93,500 a feature in a relief bounce from a breakdown. That is a possible outcome in light of Bitcoin’s historical pattern in closing nearly all its CME Gaps from mid-March 2024.

Bitcoin Short-Term Holders and Panic Selling

Beyond technical trends, on-chain data also captures rising sentiment in the market. CryptoQuant contributor Axel Adler Jr. monitored short-term holders’ (STH) activity with the assistance of the STH Market Value to Realized Value (MVRV) ratio. The ratio compares BTC’s valuation with buyers’ cost basis in recent transactions.

Adler highlighted that the STH MVRV (155-day) metric has dipped below 1, signaling periods of short-term undervaluation. Historically, such drops have often indicated potential market reversal points as panic selling reaches exhaustion.

While Bitcoin’s recent drop eroded confidence in the market, historical trends suggest a bounce, especially if BTC holds its pattern of tracking its CME Gap-filling. Traders scrutinize the $78,000 – $80,700 level of support and $93,500 level of resistance for clues about the big move.

With volatility at its peak and interest from institutions not letting up, Bitcoin’s big move is likely sooner. Will BTC reclaim its highs, or will there be more drops in its future? Investors are waiting with bated breath as Bitcoin makes its next move.