The flagship cryptocurrency, Bitcoin, fell below the $63,000 mark in the last 24 hours and is currently in a price correction, having recently hit a new all-time high (ATH) of $73,750. This price drop is believed to be due to several factors, including the Bitcoin halvingwhich is fast approaching.
Bitcoin price is in the second phase of the halving Trend
Crypto trader and analyst Rekt Capital recently provided insight into the four phases of Bitcoin Halving, which provides a plausible explanation for Bitcoin’s recent decline. He suggested that Bitcoin was entering the ‘Final Pre-Halving Retrace’, having just closed with the ‘Rally before the halving.’
This ‘Final Pre-Halving Retrace’ is said to occur 28 to 14 days before the Halving event. However, it seems like it happened earlier this time (just like the Rally before the halving), while the halving still takes about 30 days. Rekt Capital alluded to the pre-halving in 2016 and 2020, when Bitcoin retreated by 38% and 20% respectively.
Bitcoin has already retreated more than 11% in the past week. Interestingly, the analyst noted that this phase of the halving could last “several weeks and up to 77 days.” However, Rekt Capital expects it to be much shorter than historical. He added that this year’s Pre-Halving Retrace will be “more likely to be on the shallower side than on the deeper side.”
Long-term Bitcoin holders make profits
Alex DoornHead of Research at Galaxy Digital, marked in an X (formerly Twitter) after that long-term Bitcoin holders are starting to sell. This is evident from various statistics, such as the movement of coins which has been stagnant for more than a year.
Crypto analyst Ali Martinez previously alluded to this wave of profit-taking, noting data from market intelligence platform Glassnode showing that those who owned more than 1,000 BTC were increasingly cashing out. This has also led to a drop of 4.83% in this category of BTC addresses in recent weeks.
However, Thorn sounded optimistic about Bitcoin’s future trajectory in his post, noting that new whales are coming in (via the Discover Bitcoin ETF market) while some others withdraw. He also suggested that some of these whales aren’t exactly leaving the market, but are selling their spot BTC and investing in Bitcoin ETFs instead.
Bitcoin sentiment is currently bearish
Facts from Coinglass shows that the bears currently have the upper hand, with almost $82 million in the bag long positions liquidated in the last 24 hours, compared to about $23 million worth of shorts liquidated over the same period.
There has also been talk of one decrease in open interest on these exchanges, indicating that traders are currently choosing to stay out of the market. Therefore, activity in the derivatives market shows that the current outlook for Bitcoin is bearish, with many still expecting further declines.
At the time of writing, Bitcoin is trading around $63,000, down over 4% in the past 24 hours. facts from CoinMarketCap.
BTC bears reclaim control of price | Source: BTCUSD on Tradingview.com
Featured image from Analytics Insight, chart from Tradingview.com
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