Bitcoin Is Up 2X But Speculators Are Underwater: Will The Sell-off Continue?

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As an experienced analyst, I’ve seen my fair share of market ups and downs, especially in the dynamic world of cryptocurrencies. The recent Bitcoin price action has been intriguing, with its current position hovering around critical levels.

At present, Bitcoin has dropped and erased the weekend’s progressions, hovering around the threshold of $60,000. Should bears persist in their selling efforts and amplify their short positions, the likelihood of Bitcoin dipping below the psychologically significant number of $60,000 and further down to $56,800 increases significantly.

Glassnode: STHs Are In Red

At a pivotal moment as the most prized coin in the world nears the $60,000 mark, on-chain indicators suggest vulnerability in current market prices.

As a blockchain analysis expert at Glassnode, I’d like to point out that Bitcoin (BTC) presents a distinct scenario in the current market context.


 

Bitcoin has experienced significant growth over the past year, with its price rising by more than 100%. However, recent data indicates that many short-term holders (STHs), which mainly include traders and speculators, are currently underwater. These STHs represent entities or addresses that purchased their coins within the last 155 days or before the end of 2023.

In the given timeframe, not only did coin prices reach their peak and hit an all-time high by mid-March 2024, making every coin in circulation valuable, but speculators were enthusiastic and anticipating further price increases. Yet, this optimistic outlook didn’t materialize when Bitcoin suddenly surpassed $70,000 and reached a new height of $73,800. However, this upward trend was short-lived as prices took a steep downturn soon afterward.

By mid-May, Bitcoin (BTC) experienced a significant decline and hit a low of approximately $56,800. Following this drop, BTC briefly rebounded to around $71,500. However, bulls were unable to surpass the closely watched resistance level of $72,000, leaving sellers in control at the present moment.

According to Glassnode’s evaluation, even though large-scale investors (STHs) are experiencing stress, those who purchased and held onto Bitcoin within the last year have experienced profits. With a substantial increase of around two times in value over the past twelve months, Bitcoin is technically undergoing an uptrend. This trend corresponds to the market’s upward momentum during the second half of 2023.

HODLers Are In The Money: Why Are BTC Whales Selling?

Based on comparable data from various sources, it has been observed that investors who have held onto their Bitcoin for the long term, specifically those who purchased within the last five to seven years, have realized profits below $7,300. In other words, these dedicated holders have managed to make a profit even with the current market fluctuations and can afford to weather out the present turbulence until it subsides.

In light of current market conditions, data from Lookonchain indicates that significant amounts of Bitcoin have been transferred to Binance by large investors, or “whales.” Historically, such transfers to centralized exchanges are viewed as bearish signs. Consequently, the greater the number of coins moved, the more pessimistic the outlook becomes and the more likely it is to negatively impact Bitcoin prices.

I’ve been closely monitoring my cryptocurrency investments using a reliable analytics platform. By the 3rd of July, I noticed that a significant investor, often referred to as a “whale,” moved 1,023 Bitcoin, equivalent to around $62 million, to Binance. Previously, another whale had transferred a massive 1,723 Bitcoin, worth more than $106 million, to the same exchange.

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2024-07-04 05:10