A new study from Chainalysis has revealed that the dip in the price of cryptocurrencies in the summer of 2018 was mainly driven by panic selling. The study shows that the number of short term holding wallets (wallets that held onto their assets for less than six months) has increased from 12 million to 18 million in the past year.
The crypto market has begun to rebound after the recent dip, which saw prices drop almost 80% from the highs seen in January. However, research from a decentralized data analysis platform shows that the downturn was not driven by the bears, but rather by panicked Bitcoin holders who sold off their holdings to avoid further losses. According to the analysis, Bitcoin is still undervalued when compared to the price of Ether, which has been the industry bellwether for the last year. The Ether/Bitcoin ratio is currently at an all time high, reflecting the fact that Bitcoin holders are selling to avoid further losses, while Ether holders are hanging on in the hope that the market will recover.
The downturn in the cryptocurrency market over the past month has led to a lot of finger-pointing. Some have blamed the fall on the recent release of Bitcoin Core 0.17, which they say has led to a decline in the usability of Bitcoin as a currency. Others have suggested that the new Google Bitcoin ad ban has hurt the market, and some have pointed the finger at the SEC decision to call Ethereum a security — despite the fact that this move was widely expected and the smart contracts platform still has a lot of promise. However, a new report from the research firm Chainalysis suggests the downturn could have been driven by a significant number of Bitcoin hodlers cashing out.. Read more about bitcoin price and let us know what you think. The number of addresses storing bitcoins for more than a year has reached its highest ever level, data from analysis tool IntoTheBlock shows. The recent collapse of $BTC appears to be due to short-term holders selling at a loss, as the number of addresses holding #Bitcoin for longer than a year continues to rise, peaking in May. 57.61% of addresses with a BTC balance (21.94 million) hold +1 year, the company said in a tweet. The recent selling of $BTC appears to be caused by short-term holders selling at a loss, as the number of addresses holding #Bitcoin for longer than a year continues to rise, peaking in May. 57.61% of addresses with a BTC balance (21.94 million) hold +1 year pic.twitter.com/cOWi7NFaQw – IntoTheBlock (@intotheblock) May 19, 2021 This suggests that the market decline is mainly caused by short-term holders selling shares in a panic to get rid of their positions. While it’s easy to make snide remarks like paper hands, the recent drop in price places bitcoin on the eve of another cryptowinter. In this context, extreme caution is required. Image: IntoTheBlock
Market decline leads to discussion of bear market
In the past seven days, the entire cryptocurrency market has dropped by nearly 30% from $2.5 trillion to $1.8 trillion. The leading cryptocurrency is down 40% from its recent all-time high of $64,000 just four weeks ago. Since then, numerous breakouts of key support levels have led to talks of a return to a bear market. The analyst noted that bitcoin interacts with the 200-day moving average. According to him, a daily close below this level would be a bearish sign and possibly the start of another crypto winter. The fear and greed index is currently at the level of fear. Meanwhile, bitcoin continues to decline as it fails to fill large orders. Most of the volume comes from retail, the analyst writes, adding: Our latest bid-book analysis is still bullish, so our recommendation is to stay strong until this structure is broken. If this bear market continues, we could be in for a crypto winter. Image: TradingView.
In an attempt to explain the market’s decline, Breakdown podcast host Nathaniel Whittemore pointed to the recent wave of confusion. He added that he believes this is part of a larger plan to discredit cryptocurrencies. Elon’s FUD about energy. Flood Tether resurrected. Ban on Chinese FUD. Used for criminal FUD. Regulatory FUD. Welcome and then they fight with you Perhaps the most important of these news items is the information that Chinese authorities are once again calling for a ban on bitcoin. Three government agencies have reportedly urged institutions not to do business with cryptocurrency companies. Authorities extended the call to the public, reminding them that the law does not protect cryptocurrency transactions. Whatever the exact cause, the events of the past few days regarding FUD clearly demonstrate the dangerous nature of cryptocurrency investing.
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A recent study by the Luxembourg-based company, Bitpesa, found that the recent plunge of the cryptocurrency markets was not the result of a lack of support from the retail community but rather panic selling by short term investors, who bought into the market for a quick buck and are now making their exit as the market flails. According to the study, over $1.3 billion worth of Bitcoin was sold in the last quarter of 2017, an amount that has effectively sent the market into a downward spiral from which it is still trying to recover.. Read more about bitcoin price history and let us know what you think.A recent study by the Luxembourg-based company, Bitpesa, found that the recent plunge of the cryptocurrency markets was not the result of a lack of support from the retail community but rather panic selling by short term investors, who bought into the market for a quick buck and are now making their exit as the market flails. According to the study, over $1.3 billion worth of Bitcoin was sold in the last quarter of 2017, an amount that has effectively sent the market into a downward spiral from which it is still trying to recover.. Read more about bitcoin price history and let us know what you think.
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