The main cryptocurrency, Bitcoin, has fallen below the $63,000 mark in the last 24 hours and is currently undergoing price correction, having recently reached 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 rapidly approaching.
The price of Bitcoin is in the second phase of the halving Trend
Crypto Trader and Analyst Rekt Capital recently supplied insights into the four phases of the Bitcoin Halving, which provide a plausible explanation for Bitcoin’s recent decline. He suggested that Bitcoin was entering the ‘Final Pre-Halving Retrace’, having just concluded with the ‘Pre-halving rally.’
This ‘final pre-halving retracement’ is said to occur 28 to 14 days before the Halving event. However, it appears to have arrived sooner this time (just like the Pre-halving rally), with Halving still around 30 days away. Rekt Capital alluded to the pre-halving pullback in 2016 and 2020, when Bitcoin fell 38% and 20%, respectively.
Bitcoin has already fallen more than 11% in the last week. Interestingly, the analyst noted that this Halving phase could last “several weeks and up to 77 days.” Rekt Capital, however, expects it to be much shorter than historical. He added that this year’s pre-halving “would be more likely to be on the shallower side than the deeper side.”
Long-Term Bitcoin Holders Are Making Profit
Alex EspinhoHead of Research at Galaxy Digital, highlighted in an X (formerly Twitter) publish that long-term Bitcoin holders are starting to sell. This is evidenced by different metrics, such as the movement of currencies that had been stagnant for more than a year.
Crypto Analyst Ali Martinez previously alluded to this wave of profit-taking by looking at data from market intelligence platform Glassnode, which showed that those holding more than 1,000 BTC were increasingly cashing out. This has also led to a 4.83% drop in this category of BTC addresses over the past few weeks.
Thorn, however, seemed optimistic about Bitcoin’s future trajectory in his post, noting that new whales are entering (via the Spot Bitcoin ETF market) as some others are leaving. He also suggested that some of these whales are not exactly exiting the market, but selling their BTC in cash and investing in Bitcoin ETFs.
Bitcoin sentiment is currently bearish
Data from Coinglass shows that bears currently have the upper hand, with nearly $82 million in liquidated long positions in the last 24 hours, compared to only about $23 million in short positions liquidated during the same period.
There was also a decrease in open contracts on these exchanges, which suggests that traders are choosing to stay out of the market at this time. Therefore, activity in the derivatives market shows that the current outlook for Bitcoin is pessimistic, with many still expecting further declines.
At the time of writing, Bitcoin is trading at around $63,000, down more than 4% in the last 24 hours, according to data 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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