The major cryptocurrency lost more than $3,800 in value during the correction. After skyrocketing to $73,620, #bitcoin☀️ turned downward, failing to update the historic high of $73,777 set in March. The sharp drop triggered a massive panic among short-term traders, and the price is now below the psychologically important $70,000 mark.
According to analytics platform Glassnode, short-term investors took 54,352 bitcoins worth $3.76 billion to exchanges on Oct. 31 - a record high since April this year. Short-term analysts refer to those traders who hold coins for no longer than 155 days.
Unlike long-term investors, who are ready to keep cryptocurrency for years, such speculators react to market fluctuations extremely keenly. Their profits are rapidly melting away - if back on October 29, the short-term traders' profitability ratio (STH-SOPR) was 1.04, now it barely reaches 1.01. At the same time, the value of 1.0 is the break-even point.
Liquidity and market sentiment
The order book data from CoinGlass shows that a significant resistance zone has formed between the current price and the historical high. The next significant price mark may be the level of $68,000 - this is where a significant volume of sell orders is concentrated.
Of particular concern is the fact that a significant portion of bitcoins($BTC
)sent to exchanges came from traders who are at a loss. According to Glassnode, this is a classic sign of panic sentiment, when investors are ready to fix losses, just to prevent even greater losses.
Experts on the current situation
MN Trading founder Michaël van de Poppe (Michaël van de Poppe) considers the current situation quite normal. “Bitcoin is testing key support levels. It is still absolutely normal - the final correction before the next breakout to $90-100 thousand,” the analyst noted in his Telegram channel.
In turn, popular crypto analyst HornHairs draws attention to the similarity of the current situation with previous pre-election periods in the U.S.: “Mass withdrawal from risky assets 5-6 days before the election was observed in 2016 and 2020. After that, the price has never again fallen to the lows of the pre-election week. Be careful about selling at current levels”.
