Bitcoin’s sovereignty dropped to around 40% and this drop is the effect of the crash last May 19. These kinds of crashes changed market dynamics and influenced trader sentiment in the past and they still do. This is noticeable when we compare the crash to the crashes in 2017 before the price hits its peak. Will the massive crash end?
The latest drop was the second biggest when it comes to drop in market capitalization and the percentage drop in price. The last all-time high of $64863 has been hit in the last 2 months. Since then, the sentiment of traders towards Bitcoin has changed. From acquiring to HODLing/selling, retail traders and institutions have both slowed down in acquiring more Bitcoin and increased their investment inflow in altcoins and top DeFi projects. This could be totally unrelated but the crash ignites the two actions and aids the narrative of a shift in the future of the bull run.
In 2017, there have been four major corrections in the price of Bitcoin, and then the final one came to a drop of 30%, before the price can hit an ATH of $19764. The latest crash marks the second drop. This could mean that a few more crashes are possible before hitting a new ATH in the next months of 2021.
Will there be another massive crash?
A crash lasts for just less than a month and the price drops by 30-40% subsequently. As Bitcoin trades 43% away from it ATH. It is clear that an increase in the inflow of investment and enormous transactions on the network seems likely to revive the market capitalization and dominance. 12% of Bitcoin is focused in big investors’ wallets, and of them, lower than 75% are profitable at the recent price level.
Because of this, the selling pressure on Bitcoin increases. But, 58% of large investors have held it for around a year, and they will continue. Thus resisting the selling pressure and supporting the bullish narrative.
The recent on-chain sentiment is bullish, but it could also change after an increase in HODLer concentration and inflow of investment from different institutions. The GBTC premium makes it advantageous for institutions to invest GBTC and subsequently Bitcoin. This seems to have a bullish impact on the price in the long run.
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