As a seasoned analyst with over two decades of experience in financial markets, I’ve seen my fair share of market fluctuations and panics. The current Bitcoin (BTC) dip below $70,000 is no exception, but it does remind me of the old saying, “What goes up must come down.
Bitcoin (BTC) speculators panicked as the market dipped below $70,000, the latest data confirms.
According to data from Glassnode, a company specializing in onchain analysis, there was a significant sale of Bitcoin by short-term holders (those who own Bitcoin for less than a year) on October 31, amounting to around 54,000 Bitcoins – the highest such sale since April.
STH profits fizzle as BTC price gives up gains
Swift Bitcoin investors found themselves rattled when the BTC/USD exchange rate turned around from almost record-breaking levels this past week.
As reported by Glassnode, a service that monitors Bitcoin transfers from institutional holders to exchanges, approximately 54,352 Bitcoins, equivalent to around $3.76 billion at the current exchange rate, were transferred into exchanges on October 31st as inbound transactions.
In simpler terms, Service Tokens (STHs) function as digital wallets containing a specific amount of Bitcoin that has been held for between 155 days. Unlike long-term holders (LTHs), these tokens tend to exhibit reactive trading behavior rather than keeping their funds dormant for extended periods such as months or even years.
For the group known as STH, fluctuations in price are a common cause for action, and data from Glassnode suggests that their collective profit is dwindling rapidly, which might heighten the feeling of needing to offload their assets.
Currently, the STH’s Spent Output Profit Ratio (SOPR) is below 1.01, and 1 represents the break-even point. On October 29th, this ratio was close to 1.04. In simpler terms, at the moment, the STH’s SOPR indicates a slight loss, as it’s lower than 1.01, while on October 29th, it showed nearly a 4% profit, given the 1.04 ratio.
According to Glassnode’s analysis, it appears that many coins transferred to exchanges on October 31st were sent by entities who are currently in a losing position, known as STH entities.
Bitcoin risks “deviation” above $70,000
Obtain liquidity data from the tracking tool CoinGlass, which currently highlights an area with potential interest near $68,000. The ask liquidity level is now back, forming a zone that lies between the current market price and past record highs.
Considering recent developments, opinions among traders varied regarding their importance. Some expressed concern that the rise beyond $73,000 might just be an anomaly or deviation, while others suggested that the Bitcoin price pattern mirrors the trends observed during previous halving periods.
In the lead-up to both the 2020 and 2016 elections, a period of reducing risk occurred approximately 5-6 days prior to the voting day, as stated by user HornHairs on their popular platform, X.
“Price then went on to never retest the lows set the week before the election ever again. Be careful what you sell here.”
According to CryptoMoon’s update, the highly anticipated U.S. nonfarm payrolls report is scheduled for release on November 1st. This critical economic data point is closely monitored by traders dealing with risk assets.
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2024-11-01 10:50