Bitcoin has shifted back to its April price level of approximately $83,000, with escalating sell pressures encouraging numerous investors to divest at a loss, similar to significant past market downturns.
Realized losses concerning Bitcoin (BTC) have soared to numbers not witnessed since the FTX collapse in 2022, as noted by blockchain analytics firm Glassnode.
“The magnitude and rapidity of these losses illustrate a considerable reduction of demand as recent purchasers react to market declines,” remarked Glassnode in an X post on Friday.
This observation from Glassnode was made just before Bitcoin dropped to as low as $80,500 on Coinbase, representing a staggering 36% reduction from its all-time peak of $126,210 recorded earlier in October.
Short-term holders catalyzing the downturn
As per Glassnode, a significant portion of the present Bitcoin downturn is attributable to short-term holders.
CryptoQuant, another analytics firm, shared a parallel viewpoint, indicating that short-term selling patterns often denote a local bottom if the price promptly recovers to the cost basis.
“Historically, failing to do so signifies a more profound bearish trend or confirms a bearish market,” CryptoQuant stated on X.
While multiple market analysts propose that the current decline might signal the conclusion of the bull market that commenced in 2023, notable industry figures such as Samson Mow of Jan3 have expressed skepticism regarding the onset of a prolonged crypto winter.
“How can we experience a bear market when there hasn’t been a genuine bull market yet?” Mow queried in a post on X, alluding to the escalating caution within the market.
What’s the lowest point?
With Bitcoin showing declines for four consecutive weeks and the Crypto Fear & Greed Index falling into the zone of “Extreme Fear,” the pressing inquiry regarding how low BTC could sink has emerged.
“Lately, we have been breaking through support levels effortlessly, and no one appears willing to seize the opportunity,” remarked Mati Greenspan, adding:
“While I entirely dismiss the idea that we are entering a long-term bear market, if the current downturn persists, the bears may accomplish their objectives much sooner than anticipated.”
The collapse of FTX in November 2022 followed the Terra Luna crash just six months prior. Bitcoin fell from approximately $33,000 in May to below $16,000 by November, leading some observers to link the two incidents, speculating that FTX’s liquidity issues might have started before they were publicly revealed.
After reaching a low of about $15,700, Bitcoin remained beneath $20,000 for two months before launching into the bull market that began in 2023, according to CoinGecko data.
Related: Bitcoin sinks under $90K: BitMine, Bitwise execs tip bottom this week
Some influential industry optimists believe a market low may occur within a comparable timeframe now.
