Investors who bought Bitcoin around its record high of $109,000 in January are now experiencing anxiety and selling off their holdings as the cryptocurrency price drops, according to an on-chain analytics company, which warns that Bitcoin could potentially fall to $70,000.
The analysis firm noted in a recent market report that a significant sell-off by leading investors has triggered “intense loss realization and a moderate capitulation event.”
Short-term holders are retreating as Bitcoin falls
The influx of buyers entering the market at elevated prices is evident in the short-term holder realized price, which indicates the average cost for those maintaining Bitcoin for less than 155 days.
In October, the short-term realized price was $62,000. Currently, it has risen to $91,362—an increase of approximately 47% over the last five months, according to other market data.
At present, Bitcoin is trading at $81,930, resulting in an unrealized loss of about 10.6% for the average short-term holder.
Bitcoin has declined by 5.90% over the past week. Source: CoinMarketCap
The analysts pointed out that the short-term holders’ realized price demonstrates a clear shift in “market momentum and capital flows towards a negative trend, indicating diminished demand.”
They further emphasized that “investor uncertainty is impacting sentiment and confidence.”
Short-term holders are currently experiencing “substantial losses” between $71,300 and $91,900, with warnings that if the selling continues, Bitcoin could potentially reach a low of $70,000.
“There is a significant chance of establishing a temporary bottom in this range, at least in the short term,” the analysts noted.
Short-term holders are facing severe losses between $71,300 and $91,900. Source: Analytics Firm
Another market research group categorized the recent events as a “textbook correction,” noting that with Bitcoin’s drop below $80,000, “roughly 70% of the selling activity was attributed to investors who entered the market in the last three months.”
Related: Bitcoin falls another 3% — Is BTC heading towards $69K next?
On the same day, BitMEX co-founder predicted that Bitcoin might revisit the $78,000 level, and if that fails, a decline to $75,000 could occur next.
Similar sell-offs were observed in August when Bitcoin plunged from $68,000 to approximately $49,000 due to concerns over a recession, poor employment statistics in the U.S., and sluggish growth from major tech companies.
Nonetheless, Bitcoin experienced a rebound of 7.5% in the past 24 hours, as U.S. markets stabilized on March 11 after a significant drop the previous day when U.S. President suggested that a recession may be on the horizon.
This article does not constitute investment advice or recommendations. All investments and trading activities carry risks, and readers should undertake their own research before making decisions.