Bijie.com reports:
The recent sharp drop in the price of Bitcoin has caused great concern among investors. Recently, the price of Bitcoin plummeted to $54,800, largely due to the frequent transfer of confiscated Bitcoin assets by the German government to exchanges and market makers. The key question now is whether cryptocurrency has really reached its lowest point. What are the insights of market analysts on this situation?
Is cryptocurrency hitting rock bottom?
Widespread fear and uncertainty have pushed the price of Bitcoin to even deeper lows. Analysts at Bitfinex state that part of the reason for the decrease in Bitcoin trading volume is the German Federal Criminal Police Office starting to sell Bitcoin in the market. These analysts believe that the selling period is coming to an end and predict a market recovery. Visit NEWSLINKER for the latest in tech news.
This decline is mainly driven by panic, which can be seen as abnormal. Since 2023, the total market value of Bitcoin has been $224 billion, while this panic accounts for only 4% of the cumulative market value. This demonstrates the resilience and stable potential of the market.
Signs of cryptocurrency recovery
Despite the pending claims of 67% of MTGOX creditors, experts believe that this factor has led to the local bottom. Interestingly, even after the publication of this analysis, the price of BTC dropped again from $57,000 to $54,800.
Analysts closely monitoring investor behavior emphasize important details. The Spent Output Profit Ratio (SOPR) and Negative Funding Rate are combined indicators used to detect market bottoms. For short-term investors, the SOPR reached 0.97 two days ago, indicating that these investors are now avoiding selling at a loss.
Key takeaways for investors
Investors should pay attention to the following insights:
– Note periods when low SOPR is combined with negative funding rates, as these historical signals indicate a market bottom.
– Understanding the impact of institutional changes, such as government asset sales, can provide context for drastic price changes.
– Monitoring market sentiment and panic levels can provide clues for potential recovery points.
These key points indicate that considering current indicators and historical patterns, the market may experience a rebound.
In conclusion, despite recent market volatility, indicators suggest that the price of Bitcoin may recover. It is advised for investors to closely monitor SOPR and funding rates, as these indicators can provide valuable insights into market trends and potential bottoms.
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Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware of the high volatility of cryptocurrencies, which carry risks, and should conduct their own research.