Bitcoin Finds Itself In An Interesting Point: Will BTC Price Plunge?
Bitcoin price unexpectedly crashed yesterday. Even so, HODLers, it appears, are unwilling to let go of their BTC predictions and bullish long-time frame sentiment.
Bitcoin is in an uptrend, judging by its prices over the past few months. The surge above $70,000 to fresh all-time highs was a statement by bulls.
However, since then, BTC has been choppy, retracting from March highs and even flash-crashing to around $53,500 at one point earlier this month.
At press time, there are hints of weakness. Though bulls expect prices to rip higher, breaking $69,000 and $72,000 in the coming sessions, questions are beginning to be asked.
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For the third time since May, sellers have defended the $70,000 to $72,000 resistance zone. The strong uptick from July 15 to 21 didn’t lift prices above this liquidation zone.
Yesterday, Bitcoin, despite solid gains over the weekend, pulled back from around $70,000. The coin is now in red; interestingly, this correction is amid worrying coincidences.
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Fewer BTC Holders Selling: Bad Omen?
One analyst, while pointing to interesting metrics, noted that the number of BTC addresses depositing to leading exchanges, including Binance and Coinbase, has been consistently falling over the past quarter.
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The data show that the number of entities willing to liquidate their BTC holdings is down 50% in the past quarter.
This drop has been a constant over the past quarters and is a concern.
Citing on-chain analysis, the last time this happened, Bitcoin prices plunged after China banned all mining and staking activities in its territory.
Since history doesn’t repeat but can rhyme, the question remains: Following yesterday’s dip from the resistance zone, will BTC register more losses in the coming sessions?
When China banned Bitcoin mining, the hash rate, which is a measure of computing power, also fell in tandem before recovering.
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Unlike then, the hash rate is at record highs despite the recent Halving event on April 20. Historically, rising hash rate precedes price gains.
Though the network halved miner rewards, prices fell before rising to spot rates.
Unlike post-halving price action seen in 2016 and 2020, Bitcoin has better liquidity this time following the launch and trading of spot ETFs earlier this year.
(Source)
It has been pivotal, and analysts are adamant this will help prop up prices.
That there is a chance that BTC will rally going forward might also explain why coin HODLers are unwilling to sell now compared to when prices rose to over $70,000 in May and June 2024.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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