DeFi
Bitcoin Crashed Below $55,000, But Traders Aren’t Afraid, Why? — TradingView News
As Bitcoin faces strong headwinds, breaking through two critical support levels at $60,000 and $56,500 in quick succession, it may seem, at first glance, that fear is gripping the market. There is reason to be fearful, especially for coin holders who are mining BTC in decentralized finance (DeFi) protocols and looking to take out loans using the asset as collateral.
Fear Has Not Yet Invaded the Bitcoin Market
Even though prices are falling, an on-chain analyst, speaking to X, claims that the market is relatively calm and fear and panic have not yet completely taken over. Referring to the daily profit-loss ratio on Bitcoin, the analyst said that unless there is an increase in the number of addresses in red, indicating panic selling, the market can withstand more losses.
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The lack of “panic selling,” the analyst said, suggests investors are still processing current events. Even if prices fall below $56,500, the market, the analyst added, could fall to $47,000, a level that “doesn’t look as bad as it did three weeks ago when we were at $70,000.”
However, in the midst of this necessary correction, the analyst added that the recovery movement should be slower. In this way, the market correction will be done in a more orderly manner.
On July 5, Bitcoin dropped nearly 30% from its all-time highs and is under immense selling pressure. After the drop below $56,500 earlier today, it is evident that the coin is now in a bearish breakout formation. The massive selloff has forced prices out of the March-May 2024 range. This signals a new phase after the expansions of Q1 2024, when the coin surged to $73,800.www.tradingview.com/x/40w4yguj
Analysts expect more losses as sellers are in control and Bitcoin is in a bearish breakout pattern. So far, immediate support lies at $50,000 and $45,000, marking the January 2024 highs.
When is the best time to buy Bitcoin? Wait for this signal
As Bitcoin’s price plunge forces investors to seek refuge in stablecoins, another analyst believes that now could be the best time to buy more BTC at a discount. Speaking of X, the analyst highlighted several fundamental factors that paint a bullish picture in the long term.
Related Reading: This Inactive Bitcoin Wallet Holding $6.8 Million Worth of BTC Just Got Reactivated, Are They Selling It?
Among these favorable factors is the availability of Bitcoin cash exchange-traded funds (ETFs). Regulation is also clearer in the United States ahead of the hotly contested presidential election. At the same time, the analyst is convinced that the upcoming $16 billion payout by FTX trustees would be a net positive for BTC bulls.
However, before stability is achieved and this week’s sell-off is countered, there needs to be an increase in the number of new addresses. Once this is observed, it will mean that new investors are pouring in, creating demand for the cryptocurrency. For now, prices are plummeting and fewer and fewer addresses are being created.