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The main reason behind Bitcoin (BTC) decline revealed.
Armani Shirinyan
Bitcoin has dropped substantially, but it is not as bad as it may seem
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Bitcoin the drop was very unexpected, but things could be better than expected thanks to the fact that it is not being sold into the ground by institutions, and there is a silver lining not to be missed if you believe the asset is going down quickly.
Even before the US government started selling BTCspot traders had sold their stocks. As traders anticipate an increase in supply, this influx of Bitcoin into the market usually triggers a sell-off.
As expected under the circumstances, the initial market response was sustained selling pressure. The market reaction to this news was relatively calm. Some shorts have been opened waiting for the supply to arrive on the market soon. On the other hand, closing long positions was the main activity.
This suggests that although bearish sentiment exists, many traders are not actively shorting the market; instead, they are simply backing off. It is notable that institutions are not aggressively selling off Bitcoin, despite its existence pressure.
This moderation by major holders could have an advantage. The market may stabilize sooner than expected if institutional selling does not overwhelm it. Institutions are responding cautiously and persistent selling pressure in spot markets suggests an uncertain period ahead.
But Bitcoin may be able to avoid a more severe decline if it manages to hold important support levels. The US government and other major holders will have significant influence on how the price of Bitcoin will move in the near future.
Overall, the possibility of a trend reversal is present, but this would still require significant inflows, which are not there yet.
About the author
Armani Shirinyan
Arman Shirinyan is a trader, cryptocurrency enthusiast and SMM expert with more than four years of experience.
Arman firmly believes that cryptocurrencies and blockchain will be in constant use in the future. Currently, he focuses on news, in-depth articles on crypto projects, and technical analysis of cryptocurrency trading pairs.