The price of bitcoin (BTC) forms support at the $35,000 line after the sharp drop on Thursday. Since then, it has been bouncing off that figure, making small rallies to $36,500. A movement that generates uncertainty about whether we have already seen its low for this value correction or if it will continue to decline.
The rapid depreciation of bitcoin has sharpened the feeling of “extreme” fear in traders, going from a measurement of 27 to 22, according to the index Fear & Greed. The CoinGlass Data Explorer records that during the last 24 hours more than 6,650 BTC have been liquidated (sold), which represents USD 238 million. A force greater than that registered in the last three months.
This massive selling move caused its price to drop, which some see it as a buy signal and the normal behavior of the cryptocurrency. The specialist in economics and markets, GustavoBolsa, said on Twitter: “At this point, no one should be surprised by these bitcoin corrections, which being a risk asset (and not a store of value as some say) with a high correlation to the Nasdaq, if the latter falls, the cryptocurrencies follow. And so it will continue to be.”
Bitcoin is characterized by its high price volatility, but lately it was registering fluctuation minimums, which had made its value quite stable. Something that was broken with the drop from $40,000 to the $35,000 line in less than 24 hours this Thursday. A drop that was in correlation with the stock market, which fell as well. This happened after the announcements of the Federal Reserve of the United States, which generated distrust in investors.
Bitcoin shows maximum sales at the same time as purchases and holding
Bitcoin enthusiast Nicolas Bourbonni commented on the fall in the social network: «Nice that my WhatsApp sounded again with people asking me how to buy bitcoin for the first time. The topic came too calm and it feels better when they ask you about these corrections instead of it being just when it is at the top of the bull market (bullish)”.
Precisely this is because In the midst of a scenario in which bitcoin sales caused its price to drop, other investors took the opportunity to buy. Proof of this is the Luna Foundation, which announced a millionaire acquisition of 37,000 BTC during the low, thus becoming the second company with the most reserves in the cryptocurrency and dethroning Tesla from that position.
Likewise, other investors kept their reserves unsold because they estimate that in the long term their value will rise. This is evidenced in that the number of traders holding and buying bitcoin is at all-time highs. As CriptoNoticias reported, curiously, just on the same day of the price drop, the number of wallets with more than 1 BTC increased. Reason why the Crypto_Mercados account tweeted that “bullish metrics are recorded in a bearish macroeconomic and geopolitical situation”.
Another trader, Crypto Chase, said on this: “Regardless of what it says in the short term, the macro will continue to go lower. There will be bounces, pops, squeezes, short-term euphoria, you name it. But I don’t think we’ll see a macro reversal before a major capitulation or a backtracking stance from the Fed on rate hikes.”
In this sense, analysts believe that Bitcoin could continue to fall below USD 30,000 soon, but it will be necessary to see how it behaves in the following days given that there are both bullish and bearish signs in the market. At the moment, traders are neither buying nor selling below the $35,000 line.