According to U.Today, the recent unexpected drop in Bitcoin's value may not be as dire as initially feared. Despite the initial sell-off by spot traders even before the U.S. government began selling Bitcoin, the market has not been flooded with the cryptocurrency. This lack of aggressive selling by institutions could potentially lead to the market stabilizing sooner than expected.
The initial response to the increase in Bitcoin supply was sustained selling pressure. However, the market's reaction was relatively calm, with a few shorts opening in anticipation of the supply hitting the market. The primary activity, however, has been the closing of long positions. This suggests that while there is some bearish sentiment, many traders are not actively shorting the market but are instead stepping back.
Despite the existing pressure, institutions have not been aggressively selling off Bitcoin. This restraint by major holders could have a beneficial effect. If institutional sales do not overwhelm the market, it may stabilize earlier than anticipated. The cautious response by institutions and the continued sell pressure in spot markets indicate an uncertain period ahead.
However, if Bitcoin can maintain important support levels, it might be able to prevent a more severe drop. The U.S. government and other significant holders will play a crucial role in determining Bitcoin's price movement in the near future. While the possibility of a reversal exists, it would require substantial inflows, which are currently lacking.
