Sell Pressure from High-Entry Bitcoin Buyers May Lead to $70,000 Floor
Bitcoin buyers from the recent peak of $109,000 are panic-selling, contributing to sell pressure on the cryptocurrency according to Glassnode. Short-term holders are facing losses, with prices indicating a potential dip to $70,000. The market sentiment is weak, and a significant portion of recent selling stems from buyers in the last three months.
Recent analysis by the on-chain analytics firm, Glassnode, indicates that Bitcoin buyers who entered the market around its peak of $109,000 are now panic-selling, contributing to increased sell pressure. The firm suggests there is the potential for Bitcoin’s price to decline to approximately $70,000. In a report dated March 11, Glassnode noted an increase in sell-offs by prominent buyers that has led to significant loss realization and moderate capitulation across the market.
The data show that short-term holders of Bitcoin, who purchased the cryptocurrency for prices that have now been exceeded, are experiencing unrealized losses. The short-term realized price has risen from $62,000 in October to $91,362, reflecting a 47% increase in five months. Currently, Bitcoin is trading at $81,930, indicating an unrealized loss of around 10.6% for these holders. Glassnode highlights that this shift in the short-term realized price indicates a negative trend in market momentum and reduced demand strength.
Investor sentiment is reportedly tenuous, leading to uncertainty within the market. Glassnode points out that short-term investors are particularly vulnerable given that their purchases range between $71,300 and $91,900, emphasizing that continued selling could lead Bitcoin to reach a low of $70,000. The firm notes, “The probability of forming a temporary floor in this zone is meaningful…” indicating a possible stabilization point if the downtrend continues.
In a separate analysis, market research firm 10x Research characterized the situation as a “textbook correction,” noting that roughly 70% of recent selling activity corresponded to investors who acquired Bitcoin in the last three months. Concurrently, BitMEX co-founder Arthur Hayes mentioned that Bitcoin might test the $78,000 support level and could potentially decline further to $75,000 if it fails to hold this line.
Furthermore, Glassnode referenced a prior pattern in August, where Bitcoin saw a drop from $68,000 to approximately $49,000 due to recession fears, detrimental employment data in the United States, and sluggish growth in major tech stocks. However, Bitcoin’s price fluctuated, showing a 7.5% increase within 24 hours as the U.S. markets stabilized following comments from President Donald Trump regarding potential recession risks.
In summary, Bitcoin’s current market dynamics are heavily influenced by short-term holders facing unrealized losses, driving sell pressure as prices decrease. Glassnode warns of potential declines to $70,000 if selling persists, while the overall sentiment appears negatively impacted by recent market trends. As investors navigate this turbulent phase, the possibility of forming a temporary price floor remains, suggesting a cautious outlook in the near term.
Original Source: cointelegraph.com
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