As the price of Bitcoin (BTC) fell below the key support of $60,000, a wave of panic selling began in the market. Today, Bitcoin fell below $55,000, with a low of $53,485 and a high of $54,283 at the time of writing.

Who is selling behind this wave of selling? On-chain data shows that most of the selling came from novice investors who just entered the market this year. They were forced out in this "horizontal summer" and fled at a loss.

Institutional data: Newbies flee at a loss

Since the launch of the Bitcoin spot ETF in January, new investors have sprung up like mushrooms after rain, but these investors are not stable long-term holders.

Bitcoin worth approximately $2.4 billion, held for only three to six months, was moved and sold in large numbers during price declines. This type of Bitcoin activity has been even more pronounced as the volume of Bitcoin has plummeted in recent days. Soaring situation.

These entities that bought into the Bitcoin spot ETF because it was approved might be categorized as “long-term” holders, but actually behave more like short-term investors since they only entered the market at the beginning of this year.

He believes that these investors may have bought Bitcoin spot ETFs at the same time for "speculation purposes", but after listing, the price of Bitcoin only broke through a new high at one point, but it did not soar as expected. Instead, it fell back to a point basically flat or even below the cost price, which made short-term investors panic.

The realized price for short-term Bitcoin holders is currently $64,614, which is about 10% higher than the current market price.

An old hand is as steady as an old dog

In contrast, entities held for more than a year have not yet shown signs of mass selling, proving that veterans have been baptized by multiple market fluctuations and still have sufficient confidence in the face of economic downturns: "Long-term holders are still as steady as a rock and will not easily change their strategies due to short-term market fluctuations."

Although the price of Bitcoin has been trading sideways or even fluctuating downward since March, its price has only fallen by 20% from its historical high of $73,400. Compared with past cyclical bull markets, this round of Bitcoin has shown amazing stability. (But the copycats are really terrible)

Considering the recent panic selling, the next key support for Bitcoin could lie around $47,000.

The $47,000 price is 25% below the average purchase price of short-term holders, which will become a good support level and an important shock point for the market to shake off new buyers in the correction: "The organic correction in the previous bull market lasted 110 to 160 days. Whether the market will experience a similar correction again this time remains to be seen."

In general, the Bitcoin market is currently in a delicate stage. Novice investors are panicking due to price fluctuations, while veteran investors continue to remain steady. Future market trends will depend on more market parameters, but what is certain is that as the investor group gradually matures, the stability of the Bitcoin market will gradually improve.

The current big sell-off is only the first wave of sell-offs in the bull market. As long-term investors return to the accumulation state, the market selling pressure will decrease. After the funds return to the inflow, the market will pick up the upward trend again. At that time, the market will usher in the second and most lucrative stage of the bull market. The end of the high interest rate environment of the US dollar is likely to occur in the second half of this year. Therefore, although the market confidence is low and the trading volume is light, we must keep the bullets in our hands.

Market movement is a process of interaction between internal and external factors

In the first half of 2024, long-term investors in the market carried out the first wave of selling, locking in tens of billions of dollars in profits, and have now returned to accumulation.

After the approval and operation of 11 BTC spot ETFs in the United States, nearly US$14 billion flowed into the ETF channel, with an additional 240,000 BTC holdings, and the cumulative holdings reached 860,000, totaling US$53.1 billion.

Considering that this record was achieved in an environment of high US dollar interest rates, this market performance is already very outstanding.

The US dollar has not yet started to cut interest rates, and the funding pressure in the global capital market has reached unprecedented levels.

The first phase of the bull market is coming to an end, and the second phase has not yet begun. There is a high probability that changes will occur in the third quarter.

The biggest risks are the Federal Reserve's unexpected rate hike and increased selling of U.S. debt, the issuance of Mt.Gox BTC, and the U.S. government's selling of its BTC holdings.

Now should be the most depressing and painful moment before the heavy rain.

Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together. If you have any questions, you can comment and ask questions