CoinWorld reported:
Bitcoin fell sharply again around 11 o’clock, with a lowest dip of $55,111, a drop of over 6% in the past 24 hours, hitting the lowest price since the end of February this year. Ethereum also reached a low of $2,868, with a drop of nearly 10% in the past 24 hours.
Under the continuous downward trend, according to Coinglass data, the total amount of liquidation in the cryptocurrency market in the past 24 hours has reached nearly $580 million, affecting over 216,000 people.
Amidst the continuous decline, the Fear and Greed Index dropped significantly today, from 44 yesterday to 29, hitting a new low in nearly a year.
Who is panicking in the Bitcoin crash?
Behind this wave of sell-offs, who is actually selling? According to on-chain data from CryptoQuant, most of the selling behavior comes from newcomers who have just entered the market. They are forced to exit and suffer heavy losses in this market turmoil called the “sideways summer”. Since the launch of the Bitcoin spot ETF in January this year, new investors have flocked into the market, but these investors are not long-term and stable holders.
Analyst Cauê Oliveira pointed out that a significant amount of the $2.4 billion worth of Bitcoin has been transferred and sold during the recent price decline. The trading activity of these Bitcoins has significantly increased in the past few days, indicating intense market volatility.
Oliveira believes that these Bitcoins may be classified as long-term holders, but they actually behave more like short-term investors because they entered the market earlier this year. He pointed out that these investors are likely driven by speculation and bought in before and after the listing of the Bitcoin spot ETF. Although the Bitcoin price once reached a new high, it did not continue to rise as expected, but instead fell to or even below their cost price, causing anxiety among short-term investors.
According to data from LookIntoBitcoin, the current realized price for short-term Bitcoin holders is $64,614, which is about 10% higher than the current market price.
Veteran investors remain steady
According to Cauê Oliveira’s observation, entity investors who have held Bitcoin for more than a year have not shown signs of large-scale sell-offs. This indicates that experienced investors remain confident after experiencing multiple market fluctuations: “Long-term holders remain unmoved and will not change their strategies due to short-term market fluctuations.”
Although the price of Bitcoin has been trading sideways since March and sometimes fluctuates downwards, it has not fallen more than 20% from its all-time high of $73,400. Cauê Oliveira believes that compared to previous cyclical bull markets, Bitcoin has shown remarkable stability in this cycle.
However, according to analyst Axel Adler Jr. from CryptoQuant, considering the recent panic sell-offs, Bitcoin may find the next key support level, which is expected to be around $47,000.
Axel Adler Jr. pointed out that the current Bitcoin price is around $47,000, which is 25% lower than the average purchase price of most short-term holders. This level may become an important support level and help the market overcome the impact of new buyers’ fluctuations. He added, “In previous bull markets, the market has experienced organic adjustment periods of 110 to 160 days. We need to further observe whether the current market will repeat such adjustments.”
Overall, the Bitcoin market is at a critical moment. New investors may panic due to price fluctuations, while veteran investors remain stable. The future market trend will depend on more market factors, but as the investor community matures, the stability of the Bitcoin market will gradually strengthen.
How can retail investors turn the tide?
With the initial intention of getting rich overnight, many people are increasingly moving away from recovering their investment. So where is the problem? Why are there so many coins in the market that multiply by tens, hundreds, or even thousands, but one cannot make a profit from their own trades? Why are there so many wealthy people in the crypto world, but you’re not one of them?
CCTV previously reported that BTC is like a game of musical chairs, which is essentially correct. The essence of any matching trading market is like a game of musical chairs, including the stock market. The early birds eat the meat, and the latecomers take over the positions. It has always been this way. When to enter and when to exit, the buying and selling points are the key to profitability. Guizhou Moutai cannot keep rising, and neither can Bitcoin, let alone other altcoin projects.
In the crypto world, we often see certain projects increase by hundreds or even thousands of times, which is why the crypto world is so fascinating. If you have the ability, the next miracle can be yours! However, everyone knows that the increase of hundreds or even thousands of times is calculated from the opening price set by the project party, and some institutions even acquired chips at much lower prices than the opening price.
Before the public sale, there is private placement, and before the private placement, there are KOLs, and before the KOLs, there are even larger institutions and exchanges! The cost decreases at each stage, and by the time the project is launched or listed on an exchange, even if there is a market, it is already the tail end of the buying frenzy. This is especially true for many projects that target Binance. After being listed on Binance, the only thing left to do is to sell. Therefore, whether you can make money depends on which stage you participate in.
Blockchain can create wealth, and there is no shortage of miracles. Those of us at the bottom of the food chain can only continue to strengthen ourselves and climb up by stepping on countless bodies. After reaching the top, everything will be worth it!
