Bitcoin continued to be choppy as its price briefly dipped below $69,000. What followed was panic from market players.
However, data suggest that this sentiment could potentially prove beneficial for a much-needed rebound in Bitcoin’s price.
Bitcoin surged to a record peak above $73,700 on March 14, driven by heightened purchasing activity following the approval of the Bitcoin ETF in January. While it awaits a crucial event in the form of the halving, certain holders have offloaded their BTC holdings, triggering more volatility.
After wiping out all the weekend gains and falling by over 4% in just two days, the world’s largest crypto asset by market cap was back to exchanging hands at around $69,000 and even below that line. During this plunge, Santiment identified a significant shift in sentiment, which triggered initial panic among traders.
Amidst the apprehension, however, discussions surrounding #dipbuy opportunities have emerged, alongside reminders of the upcoming #halving scheduled in 10 days. Interestingly, there’s an indication that maintaining a certain level of panic could potentially serve as a catalyst for a rebound.
In yet another concerning trend, Santiment observed that the trading volume in the crypto market reached its peak on March 6th but has since been on a gradual decline. This decrease in trading activity seems to be linked to the ranging pattern that emerged in mid-March, which has led to a decrease in trader confidence regarding decision-making.
Only if top assets such as Bitcoin begin to establish a more consistent direction there could be a resurgence in consistent trading activity in the market.
On a bullish note, profit-taking, typically by long-term BTC holders, appears to be cooling off, essentially indicating a shift towards holding their tokens.
In its latest report, blockchain intelligence firm Glassnode stated that the distribution of assets between long-term Bitcoin holders and new demand indicates that the present market is in its initial phases of euphoria or price discovery.
The analysis even went on to point out that past euphoric stages have encountered numerous price declines surpassing 10%, with a significant portion being notably deeper, often featuring corrections of 25% or more.