Key Insights:
- Year-over-Year Realized Price drops to 61%, signaling ongoing market capitulation.
- $2B in short liquidations between $82K and $88K clears out bearish pressure.
- Bitcoin forms ‘Power of Three’ pattern, breaking past $87,000 resistance.
Bitcoin’s network fundamentals are improving, with the Year-over-Year Realized Price indicating ongoing capitulation. Market sentiment is turning bullish as over $2 billion in short positions are liquidated and BTC price breaks out of a Power of Three (PO3) pattern.
Rising Realized BTC Price Signals Accumulation Despite Slowdown
The current Bitcoin (BTC) market structure shows signs of accumulation. CryptoQuant data reveals the Realized Price (RP)—the average cost basis of all Bitcoin in circulation—has generally trended upward, but dipped slightly since Feb. 2025.
This local decline suggests coins are shifting from holders with higher cost bases to newer investors buying at lower prices—a classic sign of market capitulation.
The Year-over-Year Realized Price is still about 61% as of now. This implies that the network is still attracting new capital. However, the rate of inflows has slowed to the level it was in October 2024.
The capital inflow rate was higher at its peak, as demand was stronger. While the pace has dropped, the network is still expanding, and new money continues to enter, albeit at a slower rate.
Additionally, the MVRV ratio is also compressing, which tracks the speculative premium in the market. This metric compares the market value of Bitcoin to its realized value. As the MVRV compresses, it usually indicates that speculation is dropping and the market is reverting to its fundamental valuation.
Meanwhile, the Year-over-Year total return has been bouncing around 46%, not a bad number, but a far cry from the highs.
Market Clears Shorts as Liquidation Clusters Break
Meanwhile, recent data from Alphractal’s liquidation heatmap points to increased volatility in the market. A clear liquidation of short positions has been taking place over the past seven days. This means that traders who bet on the drop in BTC price were obliged to close their positions as the price moved against them.
We can see from the heatmap that liquidation levels cluster together between $82,000 and $88,000. On April 21, Bitcoin spiked up, liquidating over $2 billion in short positions. In the meantime, long positions began to be built, particularly at the $86,000 mark, with the accumulated liquidation map revealing over $15 billion of exposure.
Furthermore, Bitcoin wrapped up Sunday by liquidating the bears that had accumulated over the past 7 days. This can be a catalyst for further price movement or temporary pauses, as this type of liquidation tends to reset market dynamics.
This liquidation phase cleared short positions, but it also put market makers in a position to decide whether to continue driving prices higher or begin closing long positions. At this point, the balance between bullish continuation and profit taking is still delicate.
BTC Price Forms Power of Three Pattern, Signals Next Breakout
Meanwhile, trader Tardigrade identified a Power of Three (PO3) pattern on Bitcoin’s 1-hour chart. This pattern includes three distinct phases: accumulation, manipulation, and distribution.
Bitcoin consolidated between $84,000 and $85,500 from April 19 to 20, forming the accumulation base.
The manipulation phase followed, with a sudden dip to $83,950—likely triggering stop-losses. It was immediately followed by a sharp reversal upward.
A sharp recovery followed, taking BTC price above $87K—marking the distribution phase of the pattern. This classic market behavior often signals a breakout led by institutional hands taking control from weaker retail positions.
Currently, Bitcoin consolidates around $87,200. Analysts expect a continuation of this rally toward $91K, and possibly $100K, as long as accumulation and volume hold firm.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
