- BTC slumped about 9% to $90K amid $4B panic selling by short-term holders.
- Analysts projected a likely recovery after US Thanksgiving, citing historical trends.
As a seasoned analyst with over two decades of experience in financial markets, I have seen many bull runs and bear markets come and go. The recent 9% slump in Bitcoin to $90K was an interesting development, to say the least.
Over the last several days, Bitcoin [BTC] has decreased by approximately 9%, falling from its record high ($99,500) to $90,700. This decline is believed to be caused by a flurry of selling among short-term holders and the influence of the US Thanksgiving holiday.
Currently, at the time of reporting, Bitcoin (referred to as “king coin”) is holding steady above $93,000, providing some relief following the turbulence experienced over the past 24 hours. However, what caused the sudden and sharp decline on Tuesday, November 26th?
Why Bitcoin dumped
A substantial portion of the sale occurred on November 25-26, leading market analysts to attribute this rush selling primarily to short-term holders experiencing panic.
According to crypto expert James Van Straten, there was a significant selloff of Bitcoin (BTC) by short-term investors, amounting to approximately $4 billion. This recent selling activity surpasses the scale of carry trade unwinding that occurred in August.
One potential influencing factor could have been the American Thanksgiving celebration, as suggested by Alex Thorn, who leads research at Galaxy Digital.
Drawing insights from the 2020 Thanksgiving BTC dump, Thorn said,
Do you recall the Thanksgiving Bitcoin slump of 2020? From Wednesday, November 25th, to Friday, November 27th of that year, Bitcoin plummeted by 17%. However, within the next five months, it multiplied more than three times. Could history repeat itself?
Thorn mentioned that, according to past patterns, the local minimum for Bitcoin during Thanksgiving could occur following the recent 9% drop.
Straten reinforced the sentiment and highlighted that Bitcoin’s price trend mirrored the Realized Price by Satoshi (STH) following previous market crashes. In simpler terms, he pointed out that Bitcoin’s price movement post-dumps closely matched the average price at which all coins were last spent, as determined by Satoshi’s HODLers.
In terms reminiscent of Q4 2020, there was a striking resemblance in the setup, characterized by a significant market correction around Thanksgiving 2020. Following this dip, Bitcoin (BTC) surged dramatically from approximately $10k to $60k, experiencing multiple corrections but consistently finding support based on the STH Realized Price.
It seems some weren’t entirely convinced that the $90.7K mark served as the lowest point for this year’s US Thanksgiving.
As per the analysis by Crypt Nuevo, a Bitcoin trader, there’s a possibility that the price drop might extend towards the range of $85,000 to $88,000 before potentially turning around.
As a crypto investor, I’m closely watching the price action of Bitcoin, and it’s uncertain whether it will dip below the $90K mark. However, there seems to be a general agreement among market analysts that we might see a potential recovery following the US Thanksgiving holiday.
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2024-11-28 03:03