In the past few weeks, the BTC price recovered over 90% since crashing to $3,850. This week, Bitcoin managed to stay above $7,000 until last night when dropped below $7k.
Today, we fell even lower and touched $6,750, down 6.85%.
And following Bitcoin, altcoins fell even harder and wiped out $16 billion from the overall market capitalization. BSV dropped the most -16% while Bitcoin Cash (BCH), Litecoin (LTC), EOS, Tezos (XTZ), Chainlink (LINK), Tron (TRX), DASH, and IOTA are all down more than 10%.
The decline in BTC price in March resulted in bitcoin touching the lower historical trendlines. This has the leading digital currency trading at a “significant discount” to the historical trend in the stock-to-flow model.
Now, the ongoing price drop didn’t come as much of a surprise as bitcoin has been expected to make its way back to the south.
“I wouldn’t be surprised if “real” traders are pulling out from Bitcoin to get some gains from the stock market right now and then – take those gains and put them back into Bitcoin,” said Republican Candidate and Forbes’ David Gokhshtein.
But the pain might not be over as experts are calling for even more losses.
“Expecting this to go much lower!,” said analyst The Cryptomist.
Trader Credible Crypto is also “hunting for longs on this pullback” to $6,600. According to him, BTC could go as low as 5,300.
“The bears will appear anytime when there is a sharp sale to $7,000. If this area is broken, the bulls will have to rethink their strength, the bears will overwhelm,” wrote Xuanhaimmoer, a TradingView author.
These losses could again be the result of a massive sell-off in the equity market.
Although the stock market had its best week since 1974, despite the jobless claims rising to the historic nearly 17 million, on the back of the Federal Reserve firing another bazooka of $2.3 trillion on Thursday in response to the coronavirus relief plan, it could plummet further.
In response to Fed’s aggressive approach, Peter Boockvar, chief investment officer at Bleakley Advisory Group said, “Now outside of buying stocks, every asset class is open for the Fed to buy.”
Experts believe the rally could be just a bear squeeze and stocks could revisit new lows, which means a loss for the crypto market as well.
However, positive momentum was recorded in bitcoin’s on-chain fundamentals that grew this week. While volume increased by 23%, the total number of active entities jumped by 4.7%, indicating growth in overall on-chain economic activity.
As we have reported, both retail and institutional buyers have taken an interest in buying bitcoin. Now, as per the latest data, whales are also partaking in buying the dip.
The number of bitcoin whales, those entities that have at least 1000 BTC, increased to the levels that were last seen at the top of the bull market in late 2017.
However, this activity was during the capitulation phase and whales were selling. Now, the last time these whales jumped into Bitcoin during an accumulation phase was in early 2016.
This time, bitcoin whales increased in numbers leading up to last month’s market sell-off and accelerated during and after the crash.
“This suggests that larger market players are accumulating BTC, providing an optimistic sign,” said Glassnode.
When compared with the last halving in 2016, this trend implies that “despite an uncertain market environment, whales remain confident that now is a good time to be accumulating BTC, suggesting that they believe there is further room for growth.”