- August 27, 2024
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
As Bitcoin, the largest cryptocurrency asset, continues to display bearish movement today, dropping from about $65,000 to $62,700, sellers appear to have re-entered the market, raising alarms in the sector about potential downward pressure on the value of BTC. This recent development comes on the heels of sharp price volatility, which has caused uncertainties among investors.
Bitcoin Sellers Have Become Active In The Market
In a recent research shared on the leading on-chain data provider platform, CryptoQuant, XBTManager, a crypto trader and on-chain analyst, has cited a potential return of Bitcoin sellers in the market. Recent data indicates a possible increase in selling activity following current price fluctuations and crashes, suggesting a change in investor mood.
According to the on-chain analyst, Bitcoin witnessed a surge last week, emerging from its previous range and going through a period of extreme volatility. He noted that the price decline implies that Bitcoin may start a free pullback.
However, while BTC was facing high volatility, several networks that had been inactive during these events started to become active once again. Furthermore, based on data from the age ranges for 1w-1m spent output, over 33,155 BTC have been moved by short-term holders, which could result in immediate selling pressure from these holders.
Should these age band movements rise, the expert has underscored the importance of extra caution as they can sometimes become intense. As a result, he urged investors to look out for such developments in the upcoming days.
BTC Open Interest Sees Negative Movement
The price decline has also resulted in a drop in Bitcoin’s Open Interest (OI) across all exchanges. Leading the market intelligence platform, Santiment revealed that on the last day, there was a slight decrease of 2.2% in the price of BTC, which led to a significant decline of about 7.5% in the total open interest on exchanges.
Related Reading: Bitcoin Open Interest Plunges As BTC Crosses $60,000
Meanwhile, there has been little drop in overall open interest for altcoins like Ethereum (ETH) and Solana (SOL). Thus, Santiment has pointed out a few takeaways to watch out for as BTC’s open interest decreases.
The first development highlighted by Santiment is a transition of investors’ focus from Bitcoin to altcoins. This is because, with ETH, SOL, and other notable alts showing significant recovery since the meltdown on August 5, traders may be seeing more potential in these coins.
Another key takeaway is BTC’s risk reduction. According to Santiment, traders may be cutting back on their exposure because of uncertainty. “The lack of ETH and SOL open interest is more due to them having less sensitivity toward BTC’s price than usual this month,” Santiment added.
Other takeaways underlined by the intelligence platform include capital rotation from Bitcoin to altcoins due to the slight drop in price and a shift in market sentiment.
