Bitcoin Faces Massive Sell-Off as Short-Term Holders Panic Amid Price Correction
Summary:
Bitcoin's value saw a significant decline as short-term holders rapidly sold their holdings amid price corrections toward $40,000, according to on-chain analytics firm Glassnode. This follows the largest single-day decline in 2023 and indicates market nervousness among investor base. Glassnode's data highlights a surge in sell-offs, with Bitcoin assets worth over $2 billion being offloaded on December 12 alone. CryptoSlate's research and data analyst noted the sales, and Glassnode further pointed out that the bull market might be nearing saturation among short-term holders.
The value of Bitcoin (BTC) suffered a significant setback as traders in a state of panic began to hastily sell when prices began trending towards the $40,000 mark. This surge in Bitcoin divestment was indicated by figures provided by on-chain analytics entity, Glassnode. Data showed that on December 12 alone, Bitcoin assets worth over $2 billion were rapidly sold by short-term holders (STHs).
The largest single-day decline of Bitcoin's value was recorded this week in 2023, amounting to 8.1%. This data was confirmed by analytics provided by Cointelegraph Markets Pro and TradingView. A substantial number of Bitcoin investors reacted to this situation by staunchly limiting their market exposure, indicating an overwhelming nervousness about the market's perceived trajectory.
Glassnode's data showed that during this period, STHs, individuals who have held BTC for 155 days or less, rushed to offload coins valued at $1.93 billion on December 11. The ensuing day witnessed a sale of Bitcoin assets worth $2.08 billion.
Record-breaking sell-offs for STHs were observed in the ensuing days, with entities reporting substantial profit and loss on the same. The sell-off that exceeded the $2 billion cap hadn't been witnessed since June 2022, which was spurred by the anticipated collapse of blockchain firm, Celsius.
A note of these monumental STH sales was taken by James Van Straten, CryptoSlate's research and data analyst on December 12, who stated: “Total of $2B, with $1.1B in loss for anyone who bought between Dec. 6 and Dec. 13, mostly retail, after witnessing Bitcoin up by 150% YTD”.
Volumes were also high in terms of BTC, with transactions on December 12 being the highest since early July that year. At that point, BTC/USD was recovering from being above the $30,000 mark, after initially dipping to $25,000.
Furthermore, Glassnode pointed out numerous on-chain indicators that suggested STHs might be done with the bull market for the time being. Profit-making around the 19-month high $45,000 mark this month held a notable place; however, they also noted the onset of potential demand saturation.
The report indicated that despite a robust 2023, this rally met with resistance primarily driven by STHs, as articulated in their weekly "The Week On-Chain" newsletter published on December 12.
Among other orchestration tools, the Mayer Multiple was highlighted. This tool measures the correlation between the current spot price and its 200-week moving average. The Mayer Multiple is rapidly rising to 1.5 - a level which isn't considered "overbought", but has previously worked as a buffer in Bitcoin's history.
The Mayer Multiple was identified at 1.47, nearing the ~1.5 resistance level that was observed during previous patterns, including the November 2021 All-Time High (ATH). This article does not offer financial advice or endorsements. Every financial and trading decision involves risks, and readers are encouraged to undertake their own research before making financial decisions.
Published At
12/13/2023 12:55:02 PM
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