2024-04-07 08:51:28
After Bitcoin broke through its all-time high last month, it fell sharply. Cryptocurrency fund management company EMC Labs released a latest report pointing out that the main reason for Bitcoin’s fall in March and April was related to the first wave of big selling in the bull market. The massive sell-off is coming to an end and will set the stage for the next phase of the rally.
(Previous summary: The total market value of Bitcoin exceeds the sum of the “four major banks in the world”! The market value of BTC exceeded US$1.36 trillion and returned to 69,000)
(Background supplement: There are 2 weeks left until the Bitcoin halving! It is currently expected to start on 4/20, will it promote a sharp rise in currency prices?)
Cryptocurrency fund management company EMC Labs releases MarchReportIt is pointed out that the bull market is a market phenomenon in which new participants bring funds to the market to snap up chips under the background of abundant funds, thereby driving the original holders to sell. For long-term BTC investors, the bull market is a time for strong selling.
Bull market welcomes first big sell-off
EMC Labs said that in this cycle, December 3, 2023 was the historical high of long-term holders’ holdings. At that time, they held a total of 14916832 BTC. Since then, as the bull market has gradually started, long-term holders have begun four In the annual cyclical sell-off, as of March 31, a total of 897,543 BTC were sold. The report found that long-term and short-term investors began large-scale selling on February 26. The period from February 26 to March 12 was the first half of the big sell-off. Bitcoin was in a buying-dominated period, with the price rising from 51730.96 to 71475.93. Dollar.
In the second half of the big sell-off from March 13 to March 31 (which has not yet ended), Bitcoin was in a selling-dominated period, with the price falling from 73709.99 to as low as $60771.74. From February 26 to March 31, sellers locked in cumulative Profit of nearly US$63.1 billion.
EMC Labs said that as of the end of March, although the scale of selling had dropped significantly, it was still as high as more than $1 billion per day, causing the price rebound to fail and decline once more in April:
This kind of continuous and large-scale selling is the fundamental reason for the decline in BTC prices from March to April. This is the first round of big selling following entering the bull market. The seller has the pricing power and dampens the enthusiasm of the bulls. , causing prices to fall.
The first wave of selling is coming to an end
However, EMC Labs believes that the selling power is declining significantly, and the first wave of big selling in the bull market is coming to an end. The wave of large-scale selling before the halving in April has cleared a large number of profit-making chips and reduced the cost of BTC. The raised center of gravity will help drive up prices in the next stage.
EMC Labs explained that during the price rise period, whether profit-locking selling will lead to a price drop depends on the comparison of the game power between the long and short parties. In the early stage of the sale, the seller only sells tentatively, and the price will continue to rise. The seller continued to increase the scale of sales, which eventually led to the consumption of ammunition for many armies, causing the price to fall.
After the price fell, due to price reasons, sellers began to reduce the size of their sales, and the power of buyers continued to recover, which in turn pushed prices up once more. The two continued to compete in the rise and fall of prices until the next selling range:
During the entire rising period, similar games often occur several times. After multiple sales, most of the chips enter the short-term holder group, and liquidity becomes increasingly abundant. This makes the buyer’s power eventually lose in the long-short game. Then the bull market ends.
In the view of EMC Labs, selling is a normal phenomenon during the market rise. Based on the capital inflow of stablecoins and ETF channels and the adoption of application chains, the agency judged that there will be recurrences in the market outlook, but this round of cryptocurrency bull market is underway. It unfolds in an orderly manner. For long-term investors, on the basis of caution, they should actively go long.
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