President Donald Trump's surprise nomination of former Fed governor Kevin Warsh as the next Federal Reserve chair strengthened the dollar, unwound the precious metals rally, and pushed bitcoin below a key support level. According to Glassnode, bitcoin had been consolidating just above structural support near $83,400, the lower bound of its short-term holder cost basis model.
Support Broken, $80.7K in Focus
The breakdown is now underway. Glassnode warns that losing that zone opens the door to a deeper slide toward $80,700, the so-called True Market Mean. Over the past seven days, bitcoin lost 9.2% and now trades at $81,200. The broader CoinDesk 20 index dropped 12.4% over the same period. The Crypto Fear & Greed Index has fallen into "extreme fear" territory.
Short-Term Holders Show Resilience, but Conviction Wanes
Glassnode's report notes that short-term holder supply held at a loss stands at 19.5%, well below the 55% capitulation threshold, suggesting some resilience despite downward pressure. However, buyer conviction is being tested as prices drift lower. On the derivatives side, funding rates remain muted, signaling cautious speculative appetite. Options markets show increased demand for downside protection, with dealer gamma flipping negative below $90K, raising the risk of volatility spikes if support fails.
Extreme Bearish Sentiment Historically Signals a Bottom
Crypto analytics platform Santiment reports that sentiment across communities has plunged to extreme lows. The rise in bearish commentary on social media is a rare bright spot. "While network fundamentals are stagnant, crowd sentiment has hit extreme negativity levels," the firm wrote. "Historically, this excessive bearishness is a strong contrarian indicator that a local bottom could be near." Long-term holders are selling at the fastest pace since August. Bitwise CIO Matt Hougan recently said crypto is in the late stages of a bear-market bottom.