The cryptocurrency market is constantly a game full of surprising twists and turns. At the center of these events is Bitcoin, which recently experienced another sharp decline in value. What was the cause of this collapse? Were warning signals visible earlier? We will take a closer look at expert analyses, trying to understand the dynamics of this phenomenon and what may await Bitcoin in the future.
The recent events in the Bitcoin market have surprised many investors. Despite the previous increase in the value of this cryptocurrency above $45,000, there was a sudden significant drop. Many wonder what was the cause of such a sudden change.
Julio Moreno, chief analyst at the analytical firm CryptoQuant, suggests that the answers should be sought in on-chain data, i.e., information directly recorded in the Bitcoin blockchain. He points out that even before the collapse, this data signaled an overheated market.
One of the key indicators Moreno points to is the profit/loss margin of short-term Bitcoin holders. These investors, who acquired their coins within the last 155 days, often react emotionally to market changes. It was their behavior that may have contributed to the sudden drop in Bitcoin’s value.
Analyzing the charts, Moreno noticed that when Bitcoin reached its recent peak, the profit/loss margin of this group was at a level comparable to previous local peaks. This means that many of them might have decided to sell their assets in the face of rising profits, which in turn could trigger further price declines.
Additionally, Moreno notes that such a situation may be characteristic of the current market phase, preceding a potential increase in Bitcoin’s value. However, it is worth remembering that cryptocurrency markets are highly unstable and unpredictable, and every investment carries a risk.
Despite recent turbulence, Bitcoin has seen some increase in value, reaching around $43,400. The question remains whether this is just a temporary correction or a sign of a more stable trend. One thing is certain – the cryptocurrency market still holds many surprises, and its future is as fascinating as it is uncertain.
Photo by Kanchanara on Unsplash
