Bitcoin is back below $50,000 and fear is in the air. The historic bull market is now in jeopardy, even though holders thus far haven’t been willing to part with their coins. They might be faced with the difficult decision of doing so as prices dip lower and have to consider selling.
The selloff has already caused more coins to enter the market than the entire past year, and at the highest level since Black Thursday. If things plunge deeper, even more coins could start moving.
BTC Inflows Pick Up: First Bearish Fundamental Signal Amidst Negative Sentiment, Technicals
Massive outflows from Coinbase Pro while prices kept climbing were called the “most bullish signal ever.” All the transparent data provided by the blockchain distributed ledger can’t provide warning, however, when sentiment turns.
As cryptocurrency becomes a bigger puzzle piece of the financial world it has to deal with the repercussions of the real world. And right now, the tax environment is prompting a substantial selloff no one saw coming.
Related Reading | Sticky Situation: Strength Indicator Says Bears Have Taken Over Bitcoin
The market cooling off is the forceful hand of the US government, demanding a larger share of recent market gains. They printed the cash; you made the bets – now they want their cut. And because your gains are now bigger, the expectations they have in return have since increased also.
The rapid turn in sentiment has caused more Bitcoin to move to exchanges than all year and then some. It’s also the most since Black Thursday – and we all know what happened then.
BTC moved to exchanges reaches the highest levels since Black Thursday | Source: Glassnode
Bitcoin Cycle Reaches Inflection Point: Bear Trap Or Bear Market Coming Next?
Virtually no one is willing to sell their Bitcoin except for whales. Not even miners these days are selling. Institutions are still buying, and retail, well – they’re focused on altcoins.
Related Reading | Bitcoin NFT “The Death Of Fiat” Commemorates Historic Crypto Bull Run
But the big players are cashing out, and its crippling the bull market price action in Bitcoin. It’s cut prices down by more than 20% already, and if the trendline depicted below is lost, we could see another Black Thursday style selloff as long positions see mass liquidations.
Here's the two most uptrends compared. How deep does this selloff get? | Source: BTCUSD on TradingView.com
Bitcoin is one of the most crowded trades in finance, with everyone fully expecting prices of $100,000 and higher. If it doesn’t get there, and retraces significantly, even the strongest hands could lose hope and more BTC could move to exchanges.
If institutions continue to buy, its because they have a much longer investment horizon, and know that Bitcoin will eventually reach such prices. Don’t be fooled into selling your coins no matter how bloody its about to get.
In the fight for your BTC, the gloves are about to come off.
Featured image from Pixabay, Chart from TradingView.com
