Crypto company Galaxy published an analysis on Tuesday, March 5 this week examining the decline in cryptocurrency prices and its effects on the ongoing upward trend in the market.
The analysis, written by the company's research department, stated that Bitcoin remains "complicated for beginners" after the leading digital currency experienced a decline in value after reaching a new record high at the beginning of the week.
âThis decline was further exacerbated by the forced closing of long positions worth $400 million between 2 and 3 p.m. Eastern Time alone,â researchers said. âThe past 24 hours (as of 7 a.m. Eastern Time on Wednesday) have seen the forced closing of long positions worth more than $800 million (and exceeding $1 billion in total when including forced closures of short positions) on various cryptocurrency futures platforms.â
Stating that Bitcoin reached record levels despite the fluctuations, Galaxy stated that price instability has returned and is expected to continue "as we overcome the challenges ahead."
âSome older cryptocurrencies experienced a revival the previous day [March 5] and were likely sold off, which may have contributed to the highest price on that day,â researchers said. "Data from the blockchain shows that a significant amount of cryptocurrencies created in 2010 were activated and transferred to the blockchain yesterday - we believe they were sold. Every investor has a selling point, and if this activity was the action of a single person who then sold, it is now 2021." "They may also wish they had sold at those prices, choosing instead to make a profit as prices rise again."
However, when analyzing the Coin Days Destroyed metric, the company noted that the launches of legacy cryptocurrencies typically mark either peaks of market optimism or points of extreme market pessimism.
However, "it is clear that we will overcome the challenges ahead as long as this upward market trend continues," the researchers said, adding that they believe the rise in Bitcoin value has "just begun."
As a result, the researchers advised, "Keep your faith in the market, transfer your cryptocurrencies to your personal storages if possible, and participate in what is considered the most remarkable phenomenon in the financial markets."
