Bitcoin fell sharply yesterday and fell below $93,000. That is of course a hard blow for the people who hoped to see a price of 100,000 dollars on the boards soon. Especially when you consider that we were very close for Bitcoin with a price of $ 99,800.
Why did the price drop yesterday?
The on-chain analytics platform Glassnode knows how to narrate that “long-term investors” have started selling.
Over the past month, they sold 366,000 Bitcoin, marking the highest amount of BTC since the April 2024 peak.
The sellers mainly include people who have recently purchased their Bitcoin. The average cost basis of sellers is $57,900 according to Glassnode analysts, see chart below.
This would mainly concern people who bought their Bitcoin in the past six to 12 months, which means that they are relatively young investors. They saw their opportunity to make some gains, and have done so in recent days.
Macroeconomic headwinds
In addition to the selling by this group of Bitcoiners, there is also some macroeconomic headwind visible for the financial markets.
For example, inflation in the United States is still a problem, and yields on US government bonds have risen since the first interest rate cut by the US central bank in September.
As a result, the room for interest rate cuts by the US central bank is also limited for a while.
In addition, the prospect of a new Trump administration clearly means a strong US dollar, which is usually not good for risk investments like Bitcoin. In that respect, it is not surprising that we now saw a correction.
Profit taking by certain groups of investors and macroeconomic headwinds come together here. This does not necessarily mean the end of the bull market for Bitcoin, although we would of course have liked to see that price of 100,000 dollars sooner.
The Bitcoin Bubble Burps: A $93,000 Reality Check
Ah, the cryptocurrency market, where fortunes are made and lost in the blink of an eye. Or should I say, in the blink of a blockchain transaction? Yesterday, Bitcoin’s price took a sharp nose dive, plummeting below $93,000. I know, I know, it’s a real tragedy. I mean, who wouldn’t want to see a price of 100,000 dollars on the boards? It’s like the ultimate party game: "Who can watch their investment grow the most before it all comes crashing down?"
But seriously, folks, the on-chain analytics platform Glassnode is telling us that "long-term investors" have started selling. Now, I’m no expert, but I’m pretty sure that "long-term investors" is just code for "people who bought in last week and are already panic-selling." I mean, who needs a long-term strategy when you can just buy high and sell… well, slightly lower?
According to Glassnode, these sellers have offloaded a whopping 366,000 Bitcoin over the past month, marking the highest amount of BTC since the April 2024 peak. And who are these brave souls? Mainly people who bought their Bitcoin in the past six to 12 months, which makes them relatively young investors. Ah, the enthusiasm of youth! They saw an opportunity to make some quick gains, and now they’re cashing out before the party’s over.
But what’s really going on here? Is this just a case of buyer’s remorse, or are there some deeper macroeconomic headwinds at play? Well, it turns out that inflation in the United States is still a problem, and yields on US government bonds have risen since the first interest rate cut by the US central bank in September. Not exactly the most encouraging signs for the financial markets, if you ask me.
And then there’s the prospect of a new Trump administration, which usually means a strong US dollar and a not-so-strong interest in risk investments like Bitcoin. I mean, who needs a stable store of value when you can invest in a cryptocurrency that might just moon tomorrow? But I digress.
The point is, folks, that profit taking by certain groups of investors and macroeconomic headwinds have come together to create this correction. But does it mean the end of the bull market for Bitcoin? Not necessarily. After all, as any seasoned investor will tell you, "markets are unpredictable, and we’re all just making educated guesses." Or, you know, just winging it and hoping for the best.
So, if you’re a Bitcoin investor, don’t panic (yet). Just remember that the cryptocurrency market is a wild ride, full of twists and turns. And if you’re not already invested, well, you might want to consider just sticking with your stable store of value – you know, the one that doesn’t fluctuate wildly on a daily basis.
Bitcoin Plunges Below $93,000 as Investors Take Profit and Macroeconomic Headwinds Intensify
Bitcoin fell sharply yesterday, dropping below the $93,000 mark and dashing hopes of a $100,000 price tag in the near term. With Bitcoin’s price having soared to a recent high of $99,800, the sudden decline comes as a significant blow to investors who had been eagerly anticipating a six-figure price point.
Why Did the Price Drop Yesterday?
On-chain analytics platform Glassnode attributed the price drop to a surge in selling activity among long-term investors, who have been offloading their Bitcoin holdings in droves. Over the past month, these investors have sold a staggering 366,000 Bitcoin, marking the highest amount of BTC sold since the April 2024 peak.
A Shift in Investor Sentiment
According to Glassnode analysts, the average cost basis of sellers is approximately $57,900, indicating that the primary drivers of this selling activity are relatively new investors who purchased their Bitcoin within the past six to 12 months. These investors, who had been holding onto their Bitcoin in anticipation of further price appreciation, are now taking advantage of the recent gains to realize their profits.
Macroeconomic Headwinds
In addition to the profit-taking by certain groups of investors, the Bitcoin market is also facing headwinds from macroeconomic factors. Inflation in the United States, for instance, remains a persistent concern, and yields on US government bonds have risen significantly since the first interest rate cut by the US central bank in September. This has limited the room for interest rate cuts by the US central bank in the near future.
A Strong US Dollar and its Implications
Furthermore, the prospect of a new Trump administration is expected to further bolster the US dollar, which is typically detrimental to risk investments like Bitcoin. As a result, it is not surprising that Bitcoin has experienced a correction, with profit-taking by certain groups of investors and macroeconomic headwinds converging to drive down the price.
The Future of the Bull Market
While the recent price drop may be a setback for investors, it does not necessarily signal the end of the bull market for Bitcoin. However, the prospect of a $100,000 price tag in the near term appears increasingly unlikely, at least for now.
