Bitcoin is under fresh selling pressure as long-term holders offload coins at the fastest pace since August, even as some market participants argue the downturn may be approaching its final phase.

The latest decline follows a shift in the macro backdrop after U.S. President Donald Trump unexpectedly nominated former Federal Reserve governor Kevin Warsh to lead the Federal Reserve. The announcement lifted the U.S. dollar, unwound the recent rally in precious metals, and helped drive bitcoin below a critical technical support area.

According to onchain data from Glassnode, bitcoin had been hovering just above structural support near $83,400, a level that marks the lower bound of its short-term holder cost-basis model. A sustained break below that zone raised the risk of a deeper pullback toward $80,700, a level Glassnode refers to as the “True Market Mean.”

That breakdown is now taking shape. Bitcoin has fallen more than 9.2% over the past seven days and is trading near $81,200. Losses have spread across the broader crypto market, with the CoinDesk 20 (CD20) index down 12.4% over the same period, pushing the Crypto Fear & Greed Index into “extreme fear.”

Even so, Glassnode noted that short-term holder supply sitting at a loss remained at 19.5% while BTC traded above prior support, well below the roughly 55% threshold typically associated with full capitulation. The data suggests the market has yet to reach a point of widespread forced selling, although buyer confidence continues to erode as prices drift lower.

Derivatives markets reinforce the cautious tone. Funding rates remain muted, signaling limited appetite for leveraged bets, while options markets show rising demand for downside hedges. Dealer gamma has turned negative below $90,000, increasing the likelihood of volatility spikes if additional support levels give way.

Taken together, the indicators describe a market that is fragile but not yet fully broken, with liquidity conditions likely to dictate the next major move.

At the same time, extreme pessimism across crypto communities could be flashing a contrarian signal. Analytics firm Santiment reports that sentiment has dropped to levels that have historically preceded price recoveries.

In a recent report, Santiment described the surge in bearish social-media commentary as one of the few constructive signals in an otherwise bleak environment. “While network fundamentals are stagnant, crowd sentiment has hit extreme negativity levels,” the firm wrote, noting that such excessive pessimism has often coincided with local bottoms.

Bitcoin prices have trended lower in recent months as long-term holders increase selling, a move that has coincided with a reversal in the U.S. dollar’s earlier weakness. Even so, some industry observers believe the current wave of fear may be short-lived.

Bitwise CIO Matt Hougan recently said on CoinDesk’s Markets Outlook that crypto appears to be in the late stages of forming a bear-market bottom, adding that historically, digital-asset markets have often moved against prevailing crowd sentiment.