As Bitcoin dips below the $65,000 mark and is currently trading at $64,886, the cryptocurrency market is witnessing a heightened sense of urgency among traders.
This recent downturn reflects a broader trend seen over the past week, with Bitcoin losing around 2.4% of its value. There was a further decline of 1% in the last 24 hours alone, indicating increasing nervousness in the market.
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Should you panic?
Analysts from the blockchain analysis platform Santiment Highlight the ongoing decline is the steepest three-day decline in active Bitcoin portfolios since the peak earlier in March, indicating a significant shift in investor behavior and market sentiment.
However, this is in stark contrast to ETH, as Ethereum portfolios continue to rise, indicating divergent investor confidence among the leading cryptocurrencies.
The increase in the number of Ethereum wallets indicates a bullish outlook for ETH, despite the bearish pressure on Bitcoin. Meanwhile, the ongoing sell-off has been significant, according to Bitfinex analysts influenced by long-time Bitcoin holders and whales adjusting their holdings during the market’s consolidation phase.
This behavior is typical of long-term investors who choose to reduce their positions during periods of market uncertainty to profit from or limit losses.
The Bitfinex analyst reveals that the Hodler Net Position Change metric has consistently shown negative values, indicating that these major players are moving their holdings onto exchanges, possibly to sell, putting downward pressure on Bitcoin prices.
This trend is reflected by the rising Bitcoin Exchange Whale Ratio, which tracks large deposits on exchanges relative to overall market activity.
As more whales transfer their Bitcoin to trade on platforms, the increased potential supply in the market could lead to price declines.
Should you buy?
Despite these pressures, some analysts remain cautiously optimistic about a possible recovery. CrediBULL Crypto, a leading analyst, suggested at
There’s a chance that our $BTC the bottom is in with this SFP.
Below you can see what I’m looking at now.
Yes, technically we can still go lower into the “dream long” zone below, but as I’ve said before I wouldn’t be surprised if that zone leads the way.
That said, you’re selling the… pic.twitter.com/cI6moqbadJ
— CrediBULL Crypto (@CredibleCrypto) June 18, 2024
Funding rates in the crypto derivatives market serve as a critical indicator of traders’ sentiment. Recent data from Coinglass indicates that funding rates are slightly positive, traditionally indicating a bullish outlook among traders.
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In particular, positive funding rates imply that more traders are betting on a rise in the price of Bitcoin and are willing to pay a premium to hold long positions in futures contracts.
The financing rates are slightly positive and show bullishness.
Buy the dip.
https://t.co/iyLrhuoty0 pic.twitter.com/YFfCsGMTni
— Coinglass (@coinglass_com) June 18, 2024
This measure can often counterbalance prevailing market sentiment, indicating that despite the sell-off, part of the market is preparing for a possible price increase.
Featured image created with DALL-E, Chart from TradingView
