Veteran dealer Peter Brandt has cautioned conscious of “fear of missing out” (FOMO) buying and selling in the present Bitcoin (BTC) market, warning the market has not but in a bull run based mostly on the congestion going down.
“Bitcoin is not in a bull market that started at Feb low. Rather, BTC is in a broad congestion zone commencing at Feb highs. FOMO trading in congestion zones can be an expensive hobby.”
Since the start of this yr, Bitcoin has skilled each notable highs and lows. For occasion, the main cryptocurrency set a new report worth of $64,800 in mid-April.
Nevertheless, a month later, BTC misplaced greater than 50% of its worth in a single day to hit lows of $30K. As a consequence, this worth drop turned the primary time Bitcoin dropped under the 200-day transferring common (MA) since March 2020 because the coronavirus (Covid-19) continued wreaking havoc.
The 200-day MA is a key technical indicator used to find out the overall market pattern. It is a line that exhibits the typical closing worth for the final 200 days or roughly 40 weeks of buying and selling.
Bitcoin lately gained momentum and breached the psychological worth of $50K, but it surely skilled a correction that has made the value hover across the $45-$46K space.
BTC was down by 14% in the final seven days to hit $45,305 throughout intraday buying and selling, in accordance with CoinMarketCap.
Is the congestion being attributable to long-term and short-term holders?
According to Glassnode, long-term and short-term Bitcoin holders have been taking opposite strikes. The crypto analytic agency famous:
“The relative supply held by LTH and STH tells us an interesting story about Bitcoin: 1. Over 16.8% of the BTC supply was spent in the last 5mths and returned to profit at the recent $52.8k high. 2. Long-term holders now own 79.5% of the BTC supply, equivalent to Oct 2020.”
Therefore, long-term holders have been shopping for whereas their short-term counterparts have been promoting. Many cash modified palms in the course of the current consolidation in the $29-$40K vary.
Furthermore, Bitcoin purchased between the primary and second quarter of this yr remained tightly held, on condition that long-term traders remained unshaken by the 50% drawdown skilled in May.
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