Bitcoin Crashed Below $55,000 But Traders Are Not Fearful, Why?

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As a seasoned crypto investor with a few years of experience under my belt, I’ve seen my fair share of market volatility, and the recent sell-off in Bitcoin doesn’t scare me as much as it may seem. Sure, prices have taken a hit, breaching critical support levels at $60,000 and $56,500, but the absence of panic selling suggests that investors are still processing the current events.

With Bitcoin encountering significant resistance, dropping below key support levels at $60,000 and $56,500 in a short timeframe, it might initially seem that apprehension is widespread among investors. Indeed, there are valid causes for concern, particularly for those employing Bitcoin as collateral in decentralized finance (DeFi) platforms to secure loans.

Fear Is Yet To Grip The Bitcoin Market

Despite the decreasing prices, one cryptocurrency market analyst, speaking on X platform, asserts that the market remains relatively calm and fear or panic has yet to take hold strongly. The expert emphasizes that based on the Bitcoin Daily Realized Profit Loss ratio, an increase in the quantity of red addresses signaling significant selling is necessary before the market succumbs to further losses.

According to the analyst’s evaluation, the lack of widespread “selling in a panic” indicates that investors are still pondering over the recent developments. Despite the significant drop in prices below $56,000, the market could potentially reach a low of $47,000, which appears less daunting than it did three weeks ago when we were at $70,000.

Despite the required adjustment, the analyst advised that the market correction proceed at a more measured pace. This would result in a more organized and systematic market readjustment.

Starting from July 5th, I’ve observed a significant decline in Bitcoin’s price, which reached nearly 30% below its all-time high. The intense selling pressure became apparent after it fell beneath the $56,500 mark earlier today. This downturn indicates that Bitcoin has entered a bear breakout formation, pushing prices out of the March to May 2024 range. This shift marks the beginning of a new phase following the impressive expansion in Q1 2024 when the coin reached an astounding $73,800 price point.

As an analyst, I anticipate that sellers will dominate the market situation, leading to further losses for Bitcoin. Currently, the price action exhibits a bear breakout formation. Notably, the nearest support levels are located at $50,000 and $45,000 – these represent the January 2021 highs.

As the market experiences a significant downturn, some investors are turning to stablecoins for safety. However, according to one analyst, this dip could represent an opportune moment to acquire more Bitcoin at a reduced price. Via X, the analyst highlighted several fundamental reasons that suggest a positive outlook for the future.

As a curious researcher, I came across an intriguing piece of news recently – a dormant Bitcoin wallet with a balance of approximately $6.8 million in Bitcoin has been reactivated. The question on everyone’s mind is, are the owners planning to sell? Let me share some insights from my investigation.

Some favorable conditions for Bitcoin’s price rise include the emergence of Bitcoin spot ETFs in the market. Additionally, regulatory certainty in the US before the presidential election is expected to bring positivity. Furthermore, the upcoming $16 billion payout from FTX trustees is believed to boost the confidence of bullish Bitcoin investors.

Before the market finds stability following this week’s sell-off, there needs to be an increase in new cryptocurrency addresses. Once I notice this trend, it would indicate that new investors are entering the market, thereby driving demand for the coin. Currently, prices are dropping, and the number of new addresses being created is decreasing.

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2024-07-06 14:57