- U.S. retail and institutional investors have significantly reduced Bitcoin (BTC) buying activity, with panic selling observed in recent days.
- The Coinbase Premium Index (CPI) dropped below zero, signaling increased selling pressure from U.S. investors.
- Despite sell-offs, bullish sentiment persists, with over 28,000 BTC worth $2.6 billion accumulated by OTC-linked addresses.
- Spot market data shows $314.70 million more BTC was bought than sold in the past week, indicating continued accumulation.
- Liquidity concerns remain, with a major liquidation level at $92,930.28 potentially acting as a price magnet.
- Market sentiment is mixed, with low liquidity threatening upward momentum despite strong buying activity.
U.S. Investors Shift to Panic Selling
Bitcoin’s price action has been marked by uncertainty, with U.S. retail and institutional investors showing a sharp decline in buying activity. This shift comes after a period of bullish sentiment earlier in February, when the market experienced a strong price surge. However, recent data suggests that selling pressure has intensified, particularly among U.S.-based investors.
The Coinbase Premium Index (CPI), which measures the buying activity of U.S. retail investors on Coinbase compared to other exchanges, has dropped below zero. This indicates that selling pressure has overtaken buying interest, reflecting a broader trend of panic selling. This shift is particularly notable given the bullish momentum seen just days earlier, highlighting the volatility and unpredictability of the current market.
Institutional Outflows Add to Bearish Pressure
Institutional investors have also contributed to the recent sell-off. Spot Bitcoin ETFs, which saw an inflow of $70.60 million earlier in February, recorded a significant outflow of $129.10 million on February 18. This marks a continuation of the outflows observed between February 10 and 13, as institutions offloaded their BTC holdings.
These outflows suggest a cautious approach from institutional players, who appear to be reducing their exposure to Bitcoin amid uncertain market conditions. While this trend has added to the bearish pressure, it also underscores the growing divide between short-term market sentiment and long-term accumulation trends.
Bullish Sentiment Persists Amid Accumulation
Despite the recent sell pressure, there are clear signs of bullish sentiment in the market. Over-the-counter (OTC) addresses linked to long-term holding have accumulated more than 28,000 BTC, valued at over $2.6 billion. This accumulation could lead to a supply squeeze, reducing the amount of Bitcoin available in circulation and potentially driving prices higher.
The spot market also reflects a similar trend. In the past week alone, $314.70 million more BTC was bought than sold, indicating strong buying interest despite the broader market’s mixed sentiment. Asset netflow data further supports this outlook, showing consistent BTC accumulation since January 2025. These trends suggest that while short-term volatility persists, long-term investors remain confident in Bitcoin’s potential.
Liquidity Concerns Loom Over Price Action
While accumulation trends are encouraging, low liquidity levels pose a significant threat to Bitcoin’s upward momentum. Binance’s liquidation heatmap reveals a major liquidity level at $92,930.28, where $136.1 million worth of BTC buy orders have been placed.
Liquidation levels often act as price magnets, pulling the asset toward them before a potential rebound. If this pattern holds, Bitcoin could experience a sharp drop to this level before recovering. This dynamic adds another layer of uncertainty to the market, as traders and investors weigh the risks of low liquidity against the potential for a supply squeeze.
Mixed Market Sentiment and the Path Forward
The current market sentiment surrounding Bitcoin is a complex mix of bullish optimism and bearish caution. On one hand, the accumulation of BTC by long-term holders and the strong buying activity in the spot market suggest a positive outlook. On the other hand, the decline in U.S. retail and institutional interest, coupled with low liquidity levels, raises concerns about the asset’s ability to sustain upward momentum.
For now, Bitcoin’s price action remains uncertain. Key factors such as on-chain activity, liquidity levels, and broader market trends will play a crucial role in determining the asset’s next move. While the potential for a major rally exists, the risks of further declines cannot be ignored.
Conclusion
Bitcoin finds itself at a crossroads, with conflicting signals shaping its near-term outlook. The recent sell pressure from U.S. investors and institutions has added to the asset’s challenges, but strong accumulation trends and bullish sentiment among long-term holders provide a glimmer of hope.
As the market navigates this period of uncertainty, all eyes will be on key support and liquidity levels. Whether Bitcoin can overcome these hurdles and rally toward new highs remains to be seen, but one thing is clear: the coming weeks will be critical in shaping the asset’s trajectory.
