Bitcoin Pullback: Short-Term Holders Suffer Heavy Losses, Can the Bull Run Continue?Recently, Bitcoin prices have experienced a sharp pullback, triggering market panic and resulting in significant losses for short-term holders. According to on-chain data analytics firm Glassnode, Bitcoin prices plummeted over 16
Bitcoin Pullback: Short-Term Holders Suffer Heavy Losses, Can the Bull Run Continue?
Recently, Bitcoin prices have experienced a sharp pullback, triggering market panic and resulting in significant losses for short-term holders. According to on-chain data analytics firm Glassnode, Bitcoin prices plummeted over 16.5% from a high of $63,801 on July 1st to a low of $53,499 on July 5th, marking the biggest weekly drop since 2022. This decline has left 83% of short-term holders facing unrealized losses.
Short-term holders suffer heavy losses, with 83% facing unrealized losses
Glassnode analysis indicates that the recent Bitcoin crash has resulted in 83% of Bitcoin holders with a holding time of less than 155 days transforming into unrealized losses. Out of the 3.2 million Bitcoins (approximately $184 billion) held by these short-term holders, 2.9 million Bitcoins were sold recently, causing the Bitcoin price benchmark to drop to $53,000.
Market pressure is immense, and the short-term outlook is not optimistic
This decline has placed immense pressure on the entire cryptocurrency market and fueled concerns about future trends. The report indicates that if Bitcoin fails to break through $58,000 in the coming days, the long-term outlook will be revised downwards, with the current level becoming a key resistance point. As of 2:30 PM on the 11th, Bitcoin was trading at $57,594 and facing strong resistance at $58,000.
Technical analysts predict that the 200-day Exponential Moving Average (EMA) at $58,180 could serve as the first resistance line. If broken, further resistance might emerge at the $63,880 level. Cryptocurrency analyst Dan Crypto Trades stated, "The Bitcoin bull run can only be sustained if Bitcoin recovers the 200-day moving average and surpasses $59,000."
Despite ongoing market concerns, some analysts remain optimistic about Bitcoin's long-term value
Bitcoin bull Anthony Scaramucci reiterated his stance that Bitcoin will rise to $100,000 by year-end. Scaramucci pointed out that the Bitcoin price has been pressured downwards due to selling pressure as Mt. Gox begins repaying billions of dollars to creditors. He also mentioned the German government's decision to sell Bitcoin and the halving event in April this year as reasons for the price decline.
Scaramucci explained, "Whenever a halving takes place, some miners are forced to sell some Bitcoin to maintain profits, creating temporary pressure on Bitcoin." However, he remains confident in Bitcoin's long-term fundamental value and expects it to reach $100,000 by year-end.
The FTX bankruptcy case has sparked market concerns, but investor confidence remains
He also pointed out that the bankrupt cryptocurrency exchange FTX plans to reimburse billions of dollars to affected investors, with 40% to 50% of investors reinvesting based on their loyalty to the industry. Despite market fluctuations, many analysts and industry participants remain optimistic, believing that a new bull run is on the horizon.
Bitcoin spot ETFs have experienced four consecutive days of inflows, indicating strong demand for buying at lower prices
US Bitcoin spot ETFs recorded a total net inflow of $147.37 million on the 10th, extending a four-day streak of inflows. As Bitcoin prices fell below $58,000, concerns about a long-term correction increased, but it also demonstrated strong demand for buying at lower prices. According to Soso Value, Fidelity's FBTC attracted the most capital on that day, with a net inflow of $57.79 million. Franklin Templeton's ETF also saw a net inflow of $31.66 million, the largest inflow since early May. BlackRock's IBIT recorded a net inflow of $22.24 million, while Valkyrie's BRRR saw an inflow of $20.68 million. Additionally, Invesco and Galaxy Digital's BTCO showed minor inflows of less than $10 million. Grayscale's GBTC recorded a net outflow of $8.15 million, becoming the only fund with a net outflow.
Changes in government attitudes towards Bitcoin and the possibility of Fed interest rate cuts are considered factors driving price increases
Bitwise Chief Investment Officer Matt Hogan predicts Bitcoin could reach $100,000 by the end of the year. Changes in government attitudes towards Bitcoin and the possibility of Fed interest rate cuts are considered factors driving price increases.
Conclusion
Although Bitcoin prices have experienced a significant pullback recently, leading to substantial losses for short-term holders, market expectations for the future remain divided. Technical analysts believe Bitcoin faces significant near-term resistance, while some analysts remain optimistic about Bitcoin's long-term value. The Mt. Gox debt repayment and the FTX bankruptcy have exacerbated market volatility, but investors still have faith in the industry. With new bull run expectations and government policy support, Bitcoin's future direction remains uncertain.
Here are some key points to watch:
- Will Bitcoin break through the $58,000 resistance level?
- Will the 200-day Exponential Moving Average act as a support level?
- How will the Mt. Gox debt repayment and FTX bankruptcy impact the market?
- What impact will changes in government attitudes towards Bitcoin and Fed policy have on the market?
In the future, the price of Bitcoin will depend on the combined effect of multiple factors. Investors need to remain cautious, closely monitor market changes, and make informed investment decisions.
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