Former US President Donald Trump’s announcement of new tariffs on the cryptocurrency market triggered a massive sell-off, sending Bitcoin below $92,000 earlier, with losses for around 7% of its holders. This significant decline has raised concerns in the market, but according to IntoTheBlock data, such declines are not unusual in emerging markets, as historical experience has shown that any real recession does not start until the percentage of losses exceeds 20% of its holders, indicating that the current situation is still within the normal range of market volatility.
On the other hand, CryptoQuant’s analysis revealed a major purge in the market, similar to the events witnessed during the FTX collapse and the COVID-19 pandemic, where open interest witnessed a sharp decline. This purge is considered one of the indicators that usually precede major market shifts, which may reinforce expectations that the bearish phase will end soon.
Despite the panic that has gripped the market due to this drop, Coinbase Premium Gap data shows heavy buying activity from institutional investors. This activity suggests that large investors may be taking advantage of these declines to consolidate their positions, creating signs of a possible bullish reversal in the near future. These patterns suggest that large institutions view the current declines as an opportunity to buy more cryptocurrencies, which could support prices in the long term. Therefore, the market may be going through phases of volatility and purge, but there are also signs of institutional accumulation that could contribute to a bullish reversal, which is optimistic on the horizon.
Posted using Tribaldex Blog