Bitcoin prices finally stabilized after a bloody weekend, as panic selling eased and weak hands appeared to be wiped out.
At the time of preparing this article, Bitcoin is trading at just over $ 45,100, up 5% over the same time yesterday.
The lowest level during this correction was a short drop to $ 42,000 that occurred yesterday, May 17th, and this level has continued as support twice.
Bitcoin has declined and corrected 35% in the past 35 days, making it the largest correction in the current rally and almost similar to the 2017 bull market correction according to the results and analysis prepared by the “Glassnode” platform.
Using data from Glassnode’s weekly report, analysts confirm that new entrants to the market have given up and sold a loss while bitcoin holders over the long term continued to buy the decline.
Panic and selling weak hands:
Glassnode analysis indicated that the number of non-zero bitcoin addresses decreased during this correction, but the number of backlog addresses increased by 1.1% since the last decline.
And what was stated in the report, “Glassnode”:
IN ALMOST COMPLETE CONFLICT:
NEWCOMERS SEEM TO BE SELLING IN PANIC, WHILE HOLDERS OF LONG-TERM CONTRACTS ARE BUYING THE DIP, ACCUMULATING THEIR COINS, AND BUYING CHEAPER.
Glassnode added that the show held by the long-term holders has reverted to accumulation mode, a pattern that again resembles the previous summit of 2017.
Bitcoin buyers who bought their coins in late 2020 or January 2021 haven’t spent an hour.
Whereas, those shaken by an Elon Musk speech on Twitter over the weekend may have sold off at a loss while those more experienced in the cryptocurrency markets have seen these falls repeatedly.
As and during the rise of Bitcoin there is a need for healthy corrections, first to get rid of the trades with excessive leverage and secondly to get rid of weak hands so that a more natural uptrend can resume in the long term, as Glassnode pointed out, saying:
THERE ARE STRONG INDICATIONS THAT SHORT-TERM BITCOIN HOLDERS ARE DRIVING PANIC SELLING, BUT LONG-TERM BITCOIN HOLDERS HAVE STEPPED IN TO BUY THE DIP AND THEIR CONFIDENCE IS LARGELY UNSHAKABLE.
Bitcoin price forecast:
Most of the panic sell-off appears to be over, as Bitcoin finds strong support in the low $ 40,000 range.
Prices are back to their levels in early February, but are still 367% higher than the same period last year, so anyone who bought in 2020 would still be making a profit by a large margin.
The big sell-off could send prices back to the support at the 200-day moving average, which is currently at $ 40,000.
On the flip side, Bitcoin needs to break the resistance of 46,750 to make further advance and rise.