Bitcoin extended its slide on Tuesday, dropping more than $10,000 from its all-time high last week. Bitcoin, the flagship cryptocurrency, dropped below $63,000 in the previous 24 hours and is currently experiencing a market correction after recently reaching a new all-time high (ATH) of $73,750. This price drop is thought to be caused by a variety of causes, including the upcoming Bitcoin halving.
Rekt Capital, a crypto trader and analyst, has shared insights into the four stages of Bitcoin halving, which could explain Bitcoin’s recent decline. He suggested that Bitcoin experienced the “Final Pre-Halving Retrace” after the “Pre-Halving Rally”.
The “Final Pre-Halving Retrace” is stated to take place 28 to 14 days before the halving event. However, it appears to have arrived early this time around (similar to the Pre-Halving Rally), with the Halving still approximately 30 days away. Rekt Capital pointed to the Pre-Halving retrace in 2016 and 2020, when Bitcoin fell 38% and 20%, respectively.
Bitcoin has already retreated by more than 11% in the last week. Interestingly, the expert stated that this stage of the halving can take “multiple weeks and up to 77 days”. However, Rekt Capital anticipates that it will be significantly shorter than previous ones. He also stated that this year’s Pre-Halving Retrace “would more likely be on the shallower side than on the deeper side”.
Alex Thorn, Head of Research at Galaxy Digital, stated in an X (formerly known as Twitter) post that long-term Bitcoin investors are beginning to sell. This can be seen by several kinds of metrics, including the movement of coins that had been stagnant for more than 12 months.
Crypto analyst Ali Martinez had already referred to this wave of profit-taking, citing statistics from market intelligence site Glassnode that showed users with more than 1,000 BTC were increasingly cashing out. This has also resulted in a 4.83% drop in this category of BTC addresses during the last several weeks.
Thorn, on the other hand, appeared positive about Bitcoin's future trajectory on his part, pointing out that new whales are entering (via the Spot Bitcoin ETF market) while others are leaving. He also stated that some of these whales are selling their spot BTC and investing in Bitcoin ETFs rather than quitting the market altogether.
Coinglass data suggests that bears presently have the upper hand, with about $82 million in long positions liquidated in the last 24 hours compared to just about $23 million in shorts liquidated during the same period.
There has also been a decrease in open interest on these exchanges, indicating that traders are preferring to stay out of the market at this time. As a result, activity in the futures market indicates that the present outlook for Bitcoin is gloomy, with many still expecting further declines.
According to CoinMarketCap, Bitcoin is currently trading at about $63,000, down more than 4% in the last 24 hours.
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