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Analyst Reveals Price Point That'd Spark Massive Bitcoin Selling

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By Dewey Olson - - 5 Mins Read
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In a recent analysis, FxPro trader Alex Kuptsikevich revealed a key price level that could trigger high selling pressure in the Bitcoin market. According to Kuptsikevich, if Bitcoin hits $60k in the coming days, it could prompt a wave of panic selling among investors.

Bitcoin saw a turnaround in the last 24 hours, with a 2.5% increase to reach $62,639.1 by 08:16 ET (12:16 GMT). This uptick occurred after the digital currency almost dropped below the $60,000 support level.

Market Sentiment and Technical Analysis

Despite recent performance in Bitcoin price swings, it has been relatively stable between $60,000 and $70,000 since March. This range-bound behavior followed the highly anticipated halving event in April, which turned out to be more of a "sell-the-news" event due to a lack of significant market catalysts.

According to reports, inflows from exchange-traded funds (ETFs) have decreased in recent weeks, contributing to the prevailing negative sentiment.

Analyst Alex Kuptsikevich highlights the significance of the $65,000 level as crucial for Bitcoin's sentiment to become positive. He suggests that traders are closely watching for a breakthrough above $65,000 in order to confirm a favorable market outlook.

This development, along with miners' potential selling of assets and concerns about regulatory pressures, has shaped the current market dynamics.

"A failure below $60K could trigger something of a panic sell-off. The positive scenario, in our opinion, will become the main one with a rise above $65K, fixing the price at the 50-day moving average and the reversal area in early May," he stated.

"There is pressure likely related to asset sell-offs by miners and fears of tighter regulation of cryptocurrencies," Kuptsikevich said, referring to the drop in mining difficulty after April’s halving.

Potential Market Scenarios

Kuptsikevich pointed out that the decrease in mining difficulty after the halving event in April was another element impacting the price of Bitcoin.

The complexity of solving mathematical puzzles needed to validate transactions on the blockchain is measured by mining difficulty.

A drop in mining difficulty may signal difficulties for miners, potentially resulting in sell-offs and impacting market sentiment.

Short-Term Holders and Market Influence

Similarly, according to Coindesk, some analysts at Ryze Labs revealed that the behavior of short-term Bitcoin holders - those holding for less than 155 days, could impact the market in the coming months.

Ryze Labs' gave specific instances where 94% of both long-term and short-term Bitcoin holders were in profit, notably from mid-November 2017 to mid-April 2017, mid-February to mid-April 2021, and most recently, from the end of February 2024 to the beginning of April.

“In the most recent cycle, short-term holders had Bitcoin valued at $218.9 billion. While most were initially in profit, they started to sell actively. About one month after this period, the maximum price drawdown from the period's high is approximately -6%,” Ryze Labs noted.

In previous periods, short-term investors held peak Bitcoin values of $117.8 billion in 2017 and saw a rise to $289.9 billion in 2021.

Long-term holders and miners tended to offload Bitcoin to short-term holders during these times.

However, after these peaks, short-term holder losses started, leading to a cycle inversion where short-term sellers began offloading to long-term holders.

"The current cycle may differ from previous ones due to institutional demand supported by improving macroeconomic conditions," Ryze Labs analysts pointed out.

"However, if these supportive factors weaken, a Bitcoin price drawdown similar to past cycles could occur."