Large-scale investors in cryptocurrencies, including Bitcoin, are increasingly putting their assets on the market, leading to a consistent downward pressure on prices. Analyst Jordi Visser highlights that these market trends bear a striking similarity to the aftermath of the early 2000 dot-com crash.

Visser pointed out that the fluctuating prices in today’s crypto market resemble the dire conditions following the collapse of the dot-com bubble, which saw stock values plunge by up to 80%. This downturn was subsequently followed by 16 years of limited recovery before stocks reclaimed their earlier peaks. He stated:

“Many stocks were trading below their IPO prices. We have a similar situation going on right now. VC and insider investors, desperate for liquidity or redemption, sold into every rally. That’s what’s happened to me for Solana, Ethereum, for every altcoin, and for Bitcoin.”

Roughly translated: “Many stocks were struggling below their initial pricing. We’re currently facing a similar scenario where venture capitalists and insiders, in need of cash or compensation, sold off during any market upswing.”

Visser assured that crypto prices wouldn’t take as long to recover as their tech counterparts did in the dot-com era but used this historical context to demonstrate the current sell-side dynamics affecting the crypto market. He also mentioned that crypto might just be on the verge of exiting this phase, possibly within a year.

This perspective comes during a time where fears of a bearish phase in Bitcoin have emerged, prompting analysts to revise their once optimistic price predictions.

Is Bitcoin Stabilizing Near the $100,000 Mark?

Some analysts suggest Bitcoin prices are approaching stabilization around the $100,000 level; however, there are fears of a further decline to approximately $92,000 should sales pressure persist.

Both traders holding large volumes and long-term investors generally sell at market peaks, and according to Julio Moreno, an analyst at CryptoQuant, this trend is not inherently detrimental.

He articulated:

“Since October, long-term holder selling has increased; nothing new here, but demand is contracting, unable to absorb long-term holder supply at a higher price.”

Roughly translated: “Since October, there has been a rise in selling by long-term holders, a pattern that is not unprecedented, but the demand has decreased, unable to accommodate the supply being released at elevated prices.”

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US stock market and cryptocurrency dynamics
The US stock market took nearly 16 years to recover to its previous highs, hindered by large investors offloading shares into the market. Source: Jordi Visser
Long-term BTC holders are releasing assets at an alarming rate
Long-term Bitcoin holders are now rapidly selling their assets at a higher rate than the market can handle. Source: Julio Moreno