Bitcoin Storm Caused By Newbies’ Panic-Selling

Bitcoin advocates are optimistic that Bitcoin (BTC) will rebound harder after its recent Elon Musk-fueled price blow. Galaxy Digital CEO Michael Novogratz expresses that rough seas can be expected for at least in the coming next couple of weeks as new advocates are panic-selling.

Bitcoin storm caused panic-selling after months of steady growth and declined into approximately around the USD 40,000 range on most exchanges over the weekend. The token is presently forming a sluggish and unstable improvement.

Cryptoverse folks criticized that the price drops were due to mass liquidations in the derivatives market. Some newer investors deciding to cut their losses after Musk’s Tesla announced it would stop accepting BTC citing mining-related environmental concerns as to its reasons. Musk has also denied claims that Tesla had liquidated the remainder of its USD 1.5bn worth of BTC purchase previously this year.

In an audience with Bloomberg TV, Novogratz stated that the USD 40,000- USD 50,000 price range was currently fair and added a defense of BTC mining, noting,

“I think we are going to consolidate for a while: Four to six weeks. […] I took [Musk’s] mining comments at face value. That’s everything specific: The gold market, YouTube. They all use a lot of electricity. And Elon has businesses in clean energy.”

And the Galaxy chief claimed that the crypto industry as a whole was working on Environmental, Social, and Corporate Governance (ESG)-related initiatives, with some already planning to mitigate miners’ environmental impact with carbon offset projects and carbon credits.

He mentioned that,

“Like all industries, ESG is important. And the crypto industry including Galaxy is going to address it.”

Last week, Galaxy Digital Research published a report that claims that the gold industry and the banking system are using much more electricity than the Bitcoin network.

bitcoin storm
Source: Galaxy Digital

Did panic-selling really caused the Bitcoin storm?

Glassnode, a crypto market analysis provider, published in their latest report,

“The [proof-of-work] energy consumption narrative is nuanced, to say the least, and what follows will be a test for the whole Bitcoin market’s conviction.” 

For price-observers, Novogratz stated he was optimistic about regulatory development. Galaxy and others are expecting of winning American Securities and Exchange Commission authorization for a BTC exchange-traded fund (ETF) “at the end of this year or early next year,” calling approval “the next catalyst” for price growth.

Glassnode stated that it noticed “new entrants panic-selling” and BTC “HODLers stepping in to buy the dip.”

The analyst reiterated that while this is the most thorough adjustment of the current bull market, it is steady with five major pull-backs during the 2017 bull.

Glassnode stated that the number of addresses in accumulation has increased by 1.1% since the recent low. A total of 1.1 million addresses have spent all coins they held during this correction; Thus providing evidence that panic selling is currently underway. 

In addition, the amount held by long-term holders has reverted to accumulation mode; a similar pattern that again echoes the 2017 macro top.

They also remarked that a pattern of panic selling is comparable to that observed at the 2017 macro peak. The firm didn’t rule out that. It may be a more significant timeline pull-back in a bull cycle; as feeble hands give up and stronger hands resume their pile of cheaper coins.

Novogratz also had a word for ethereum (ETH) advocates. He commented that the token would swing within USD 2,800 and USD 4,000. This is in its consolidation period that would also last up to six weeks.

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