According to a recent analysis by Santiment, the supply of Bitcoin on various exchanges has dropped significantly. The insight suggests that some people stuck with the cryptocurrency during the recent market volatility are still willing to ride it out.
BTC is Below the $20K Level
The Bitcoin bear market has entered its deepest phase yet. Many long-term cryptocurrency holders have already lost their money due to the sudden decline. BTC is trading around $18,265.93, 11.07% below yesterday’s value. Bitcoin fell as much as 36.34% over the last day.
According to the experts, the current bear market is entering its deepest phase. It’s entering a phase-aligned with the darkest phases of previous bear markets. The price of Bitcoin is below its cost basis, and long-term investors are getting rid of their money.
Market observers are now focused on identifying the groups of investors most likely to get hurt during the current bear market. With Bitcoin around December 2020 lows, many new entrants are now underwater.
UBS noted that it’s monitoring the performance of Bitcoin miners, who have been under pressure due to the high energy costs and their capex commitments. Digital-asset investors have been spooked by the actions of Celsius Network, a crypto lender. The company suspended its operations last week after a key inflation figure came in higher than expected. The Federal Reserve is expected to be more aggressive in its efforts to cool the rising prices.
HODLers are Weakening Accumulation
According to Glassnode’s strategists, a change in the net position of the most prominent investors known as the HODLers can be used to estimate the amount of coin volume they’re distributing and accumulating.
The decline in the number of Bitcoin transactions over the past month suggests that the accumulation is weakening. It suggests that the hands of hodlers will handle around 15,000 to 20,000 transactions per month.
The value of Bitcoin has dropped more than 30 percent this month. On Wednesday, it lost another day, marking its ninth straight decline. Over the past three days, its rate of change has dropped by over 24 percent.
In an interview, Brian Nick, the chief investment strategist of Nuveen, said Bitcoin could continue to fall once it starts moving quickly. He noted that if it can move 20 percent in two days, it could move another 20 percent in the next couple of days.
From the 20K “High” Status to “Low”
A few days ago, a tweet by a prominent crypto trader went viral, stating that the current market conditions show that the digital asset ecosystem has experienced rapid growth over the past couple of years. In 2017, people thought that Bitcoin was too expensive. However, today, they say that the same price is not enough for Bitcoin.
According to Changpeng Zhao, the CEO of Binance, the current state of the crypto market is a sign that it is maturing. He noted that in 2017, when the market was at its peak, 20k was considered crazy high now; it is painfully low.
Meanwhile, according to Mike McGlone, a senior Bloomberg analyst, the Bitcoin price is currently around $20,000. He says this is similar to the $5,000 it was in the past. In addition, he noted that the price of Bitcoin may rise to around $20,000 before it hits the $5,000 mark. He was referring to the early days of Bitcoin’s global adoption.
According to Mike, Bitcoin is currently in a similar situation to when it struggled to make a strong support level at $5,000. He thinks that it could potentially reach a bottom at $20,000.