- Over the last week, long-term holders finally gave up liquidating more than 178K Bitcoin under the $23,000 price levels.
- Market analysts ask investors to maintain cautious optimism after the recent bounce. The global macros still don’t seem in a good shape.
The last week was another week of brutal correction for Bitcoin investors! Last weekend, the Bitcoin (BTC) price crashed all the way under $18,000 amid major liquidations taking place. The liquidity crisis for the crypto markets doesn’t seem to be ending anytime soon. After Celsius Networks, Solana-based decentralized protocol Solend is starring another liquidity crisis.
Although Bitcoin has recovered partially from Saturday’s low, the investor confidence seems down for now. As of press time, Bitcoin (BTC) is trading 7.9 percent up at a price of $19,963 with a market cap of $380 billion.
There have been some key on-chain developments with Bitcoin entering capitulation, miners liquidating, and long-term holders booking losses. Furthermore, the global macro developments will continue to weigh in deciding further on BTC momentum.
Key on-chain developments for Bitcoin to watch
- On-chain data provider Glassnode reported that the last three days witnessed the largest USD-denominated Bitcoin loss in history. “Over $7.325B in $BTC losses have been locked in by investors spending coins that were accumulated at higher prices,” it states.
- Last week, long-term holders sold 20K-36K Bitcoins per day. This typically includes holders who accumulated coins in H1 2021 or before.
- Below $23,000, Bitcoin long-term holders sold 178K Bitcoin i.e. 1.31 percent of their total holdings. With this, the total BTH holdings dropped to the level of September 2021. Glassnode explains: “A few Bitcoin LTHs even bought the $69k top, and sold the $18K bottom, locking in -75% losses”.
- After strong accumulation for the last two years, Bitcoin miner holdings have been now on a decline. Last week, Bitcoin miners liquidated 9,000 Bitcoins from their treasuries and currently hold around 50,000 BTC. With every fall, Bitcoin is slowly approaching the block production costs for miners.
Here’s what crypto experts are saying
Some market experts are asking investors to maintain cautious optimism. Bitcoin breaking under $20,000 and its 2017-high is not a good sign, of course, the recent price drop could have been because of forced sellers. Arthur Hayes, ex-CEO of derivatives trading platform BitMEX writes:
Over the weekend, while the fiat rails are closed, $BTC dropped to a low of $17,600 down almost 20% from Friday on good volume. Smells like a forced seller triggered a run on stops.
He further added that recovery might come soon due to forced selling. However, he believes that sell-side pressure could come going ahead. On the other hand, the crypto market is seeing some of the big players facing major liquidity issues. Popular investor Mike Alfred notes:
Bitcoin is not done liquidating large players. They will take it down to a level that will cause the maximum damage to the most overexposed players like Celsius and then suddenly it will bounce and go higher once those firms are completely obliterated. A story as old as time.
The global macro setup
The top U.S. indexes have faced between 20-30 percent correction from their top amid the massive price correction since May. However, the worse seems far from over. Welt analyst, Holger Zschäpitz explains:
Nowhere to hide: Stocks and bonds together are on track for their worst quarter ever. Meanwhile, credit markets have also taken a battering. Bitcoin has lost over two-thirds of its value since it touched a high of nearly $70,000 in Nov. (via BBG).
Global stock markets are still not cheap when measured by the Warren Buffett metric: The global market cap to GDP ratio has dropped to 114% but is still above the 100% threshold. pic.twitter.com/w14LkTkhuk
— Holger Zschaepitz (@Schuldensuehner) June 19, 2022
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