Bitcoin Price Declines and the Future Outlook
Bitcoin has seen an 11% decline in the past week and is currently trading around $26,000. Short-term holders who were already facing unrealized losses before the recent deleveraging event in BTC futures may have a bleak future ahead, with the possibility of further declines towards $20,000.
Bulls Defend Support/Resistance at $25,000
Despite the challenging market conditions, some bullish investors are determined to defend the support/resistance level at $25,000. Bitcoin is currently trading slightly below $26,000, and there has been a consolidation of losses over the past few days.
Indicators Point to Downside Momentum
Most indicators, including the Relative Strength Index (RSI), suggest that the path of least resistance for Bitcoin is downwards. The RSI is currently at its lowest level since March 2020, indicating that further dips may be expected. However, experts believe that there is still potential for a surprise breakout, considering Bitcoin’s previous bull run from lows of $3,800 to an all-time high of nearly $70,000.
Short-Term Holders Face Unrealized Losses
According to on-chain analytics firm Glassnode, the recent deleveraging event in the BTC futures market resulted in the largest single-day sell-off in 12 months. Short-term holders now hold 88.3% of their supply in unrealized losses. This increase in supply facing losses is a result of buying Bitcoin near or above the current market price, leading to a “top-heavy market.”
Market Outlook and Advice from an Analyst
Glassnode suggests that last week’s fall in Bitcoin price could be followed by more significant downtrends, based on historical data from May and December 2021. Despite this negative outlook, trader and analyst @AltcoinSherpa encourages investors to stay the course and focus on surviving the bear market. He believes that the worst has already happened, with Bitcoin dropping from $70,000 to $15,000, and advises investors not to make any hasty decisions before the bull market truly returns.
Hot Take: Bitcoin’s Short-Term Holders Face a Gloomy Future
The recent decline in Bitcoin’s price has put short-term holders in a difficult position, with the possibility of further declines towards $20,000. Despite bullish attempts to defend support/resistance levels and the potential for a surprise breakout, indicators suggest that the path of least resistance is downwards. Short-term holders are facing unrealized losses, and historical data indicates the potential for more significant downtrends. However, it is crucial for investors to stay resilient and focus on surviving the bear market before the bull market returns.
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