The world’s largest crypto Bitcoin (BTC) continues to face massive selling pressure and is currently down over 8% moving closer to $20,000. This week has been the week of massive sell-off and liquidations. On-chain data provider Glassnode explains:
“Bitcoin investors have locked in the largest USD denominated Realized Loss in history last week. The $BTC spent on-chain this week realized net losses of over $4.23B. This eclipses all major sell-offs in 2021, and is 3x larger than March 2020″.
Furthermore, Glassnode explains the realized losses faced by short-term holders (STHs) to the tune of 0.01% of the Market Cap per day. But the data provider explains: “Whilst significant, these STH losses are not as large as major sell-offs in the last 5yrs”.
On the other hand, Bitcoin long-term holders have realized major losses equal to 0.007% of the Market Cap per day. It adds: “This is almost as large as March 2020, and is the first major LTH capitulation event in the 2021-22 cycle”.
More Bitcoin Liquidations Ahead?
While Bitcoin had a relief rally after the Fed announcement on Wednesday, it failed to retain its momentum. In the last 24 hours, Bitcoin is seeing another major sell-off trading on tenterhook support of $20,000.
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Popular crypto analyst Lark Davis explains: “If Bitcoin loses 20k and #ethereum 1k then things might move real fast, be ready. Lots of liquidations can cause a cascade”.
Speaking to Bloomberg, Galaxy Digital CEO Mike Novogratz said that the chances of the U.S. going into recession have increased. Fed’s ultimate goal currently is to reduce the soaring inflation and it would announce more rate hikes in the year ahead.
Novogratz said that unless the Fed decides to change course from its current QT measures, there’s little hope that Bitcoin would see a reversal. No one knows where the bottom is! But we are surely entering a multi-month consolidation here!
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