Bitcoin (BTC) traders are facing a harsh reality after the cryptocurrency’s recent price plunge. Data reveals that this correction is the deepest Bitcoin has experienced in 24 months, leaving a significant portion of short-term holders underwater.
Short-Term Holders Bear the Brunt of the Sell-Off
On-chain data from Glassnode indicates that over 83% of short-term Bitcoin holders (those holding BTC for less than 155 days) are now sitting on unrealized losses. This means the price at which they bought Bitcoin is higher than the current market value.
The sell-off pushed 2.9 million BTC (roughly $166.75 billion) out of the profitable zone for short-term holders, according to Glassnode. This substantial shift placed significant pressure on both Bitcoin and the broader cryptocurrency market.
Key Resistance Levels Impede Bitcoin’s Recovery
Analysts believe Bitcoin’s price recovery faces significant hurdles. The $58,000 mark is a crucial resistance zone, and as long as the price remains below this level, the long-term outlook for Bitcoin could be bearish.
Trading charts also depict challenges for bulls. The 200-day exponential moving average (EMA) sits at $58,180, acting as the first major resistance level. A further hurdle could emerge around $63,880, where the 50-day and 100-day EMAs converge.
Also Read: Mt. Gox Repay Chaos: Will Bitcoin Boom 4x Faster Than BCH Dump?
Profit-Taking and Break-Even Selling Could Hinder Price Increase
Aggressive selling from these congested zones might prevent Bitcoin from pushing higher. Investors looking to book profits or break even could trigger sell-offs, hindering any upward momentum.
Popular analyst Daan Crypto Trades emphasizes the importance of reclaiming the 200-day EMA and surpassing $59,000 as a “good start” for Bitcoin bulls. Additionally, high short bids building near this level further highlight its significance.
Conclusion
The recent Bitcoin correction has squeezed short-term holders and cast a shadow over the immediate future of the cryptocurrency. Key resistance levels and potential profit-taking pose challenges for a swift recovery. However, if bulls can recapture the 200-day EMA and push past $59,000, it could signal a turning point.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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