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Analysts Predicted the End of Panic Selling in Bitcoin
Losses of investors who bought the first cryptocurrency over the past six months have approached 13%. This level historically corresponds to capitulation and signals the peak of panic selling, CryptoQuant noted.
After the price fell below $98,401 and reached such a level of losses, short-term holders began to massively lock in losses in bitcoin.
“This created a self-sustaining cycle of fear and selling, characteristic of the final stage of a sharp correction,” the analysts emphasized.
In their opinion, such a stressful period is characterized by cleansing the market of “weak hands” and is associated with reaching a local bottom.
“Statistically, when the short-term holder cohort incurs a realized loss of this magnitude, it means that panic selling has reached its peak,” the experts concluded.
Positive Signals
Santiment drew attention to a “critical shift” in social-media sentiment amid the cryptocurrency’s drop to $95,000. Discussions about “buying the dip” sharply declined on social networks. Analysts considered this a potential sign of bottom formation.
However, overly optimistic sentiment that “it won’t get worse” was called a “warning signal.”
“A true market bottom rarely appears when the crowd confidently predicts the minimum. Usually, it forms when everyone agrees that prices will go much lower,” specialists of the analytical platform emphasized.
Swissblock analysts pointed to the rise of stablecoin dominance relative to bitcoin. This means that capital is not leaving the market but shifting into a waiting stage — classic accumulation of “dry powder,” they believe.
“There is still no panic rotation out of bitcoin,” the analysts stated.
CryptoQuant confirmed that over the past month, stablecoin reserves on Binance alone have increased by $5.76 billion.
“This indicates that traders are moving funds to the exchange to buy or trade,” the experts stressed.
As a reminder, based on three key institutional metrics, analyst Axel Adler Jr. allowed for a correction of the first cryptocurrency down to $74,000.
See also: "Robert Kiyosaki Explained Bitcoin’s Correction by a Liquidity Crisis"
