Bitcoin: Are We Seeing a Repeat of 2022 Panic Selling? Analyst Opinion…
The Kobeissi Letter stated that the decrease in available funds may have contributed to the recent cryptocurrency downturn.
Bitcoin experienced a 4.89% drop on February 24th, with the overall crypto market cap declining by 6.65% within 24 hours. This decline was evident at the time of writing.
The crypto fear and greed index plunged from 49 the previous day to 25, indicating a high level of fear among investors.
Factors such as Bitcoin ETF outflows and the S&P 500 losses, which witnessed a 1.19% drop from its peak to its lowest point, could have triggered this sudden change in market sentiment.
There is a possibility that Citadel Securities’ move to provide liquidity for cryptocurrencies might have served as a “sell the news” event.
Bitcoin Is Anticipated to Face Further Short-Term Declines…
Analyst Axel Adler utilized the Realized Profit and Loss metric to emphasize that total realized losses have been relatively moderate. Adler highlighted that the realized losses over the past quarter were much smaller compared to the panic selling seen in late 2022.
The fact that investors were accepting losses suggests a more stable market environment with sustained demand and somewhat positive sentiment. Participants were not hastily exiting their positions at any cost; instead, they were discerning in their selling approach.
Despite fluctuations, the long-term price trajectory remains upward. Sharp declines are typical during bullish periods, but current online sentiments lean towards a bearish outlook.
Although there has been a noticeable realization of BTC losses, it is indicated that the overall uptrend is likely to remain unaffected, as per the analyst’s assessment.
On the Realized Cap UTXO Age Bands metric, the breakdown of the realized market cap by age bands is illustrated. Each color band signifies the proportion of the UTXOs’ realized cap that moved in a specified time frame.
Comparing ongoing trends with past Bitcoin cycles reveals a rise in the proportion of the realized cap linked to 1- to 6-month UTXOs. This pattern often precedes further price declines.
Yet, the older age bands have demonstrated stability since January, indicating confidence among long-term holders.
Thus, it is likely that short-term market volatility and heightened losses will persist, particularly with the price hovering close to breaching the $92k support level. Nonetheless, long-term holders are advised to remain composed for now.