Bitcoin Panic Selling Rises as Price Plummets; $70,000 Target Suggested by Analysts
Glassnode reports increasing panic selling among Bitcoin investors, primarily those who bought at the $109,000 peak in January, which may drag prices down to $70,000. A significant rise in short-term holder average realized prices and a correlation with traditional market trends highlight investor uncertainty. Analysts predict possible price corrections and expect cautious market movements amid current economic conditions.
Recent data from the on-chain analytics firm Glassnode indicates that Bitcoin investors, particularly those who purchased at the peak price of $109,000 in January, are experiencing panic selling. The firm cautions that this selling pressure could drive the price of Bitcoin down to $70,000. Glassnode emphasizes that recent sell-offs by significant buyers have resulted in major loss realization, marking a moderate capitulation event within the market.
Significantly, the short-term holder realized price for Bitcoin was noted at approximately $62,000 in October, increasing to about $91,362 in the following months. This 47% rise is accompanied by Bitcoin’s current trading price of $81,930, resulting in an average unrealized loss of 10.6% for short-term holders, as indicated by CoinMarketCap data. Glassnode interprets this shift as a sign of negative capital flows and weakening demand, which have contributed to growing investor uncertainty.
Glassnode also highlights that short-term holders are encountering difficulty in the price range between $71,300 and $91,900, suggesting that $70,000 may represent a substantial bottom if selling pressure persists. They indicate that this level possesses a meaningful potential to act as a temporary floor in the near term. Concurrently, 10x Research describes the current downturn as a “textbook correction,” revealing that nearly 70% of recent sell-offs originated from investors within the last three months.
Arthur Hayes, co-founder of BitMEX, projects that Bitcoin may test the $78,000 threshold, with subsequent support potentially falling to $75,000 if this level fails. Hayes remarked on Twitter, “If it fails, $75k is next in the crosshairs. There are a lot of options OI struck $70-$75k; if we get into that range, it will be violent.”
Glassnode draws parallels between the current sell-off and the decline observed in August 2023 when Bitcoin’s price dropped from $68,000 to $49,000 due to economic uncertainty and sluggish growth in the technology sector. Nevertheless, Bitcoin saw a recovery of 7.5% on March 11 as markets stabilized which followed reflections from former President Donald Trump regarding the possibility of a recession.
Despite being perceived as a hedge against geopolitical and fiscal instability akin to gold, Bitcoin remains behaving as a risk asset, closely following equity market trends. Garrison Yang, co-founder of Mirai Labs, explains that Bitcoin’s strong correlation with traditional markets must diminish for it to fulfill its potential as a stable hedge against macroeconomic instability. Presently, Bitcoin’s price remains significantly swayed by overall investor sentiment in conventional financial markets, particularly the stock exchange.
In conclusion, the current landscape surrounding Bitcoin is characterized by panic selling among investors, particularly those who entered at the all-time high. Concerns regarding potential further declines towards $70,000 are prominent, as highlighted by notable analysts and data trends. While Bitcoin’s correlation with traditional markets continues to present challenges, the potential for a recovery remains evident, warranting close attention from stakeholders in the cryptocurrency space.
Original Source: www.tradingview.com
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