The cryptocurrency market remains highly unpredictable, with Bitcoin’s price experiencing a sudden and sudden plunge below $85,000 after experiencing brief gains. This decline signaled a shift in investor sentiment and could mark its future direction.
End of Distribution Phase by Long-Term Bitcoin Investors
Faced with ongoing price challenges, an important development has taken place among Bitcoin investors who hold long-term investments: on-chain and macro analysis expert Axel Adler Jr. observed a change in behavior among these long-term holders; they appear to have ended their phase of distributing Bitcoin which could herald a period of bullish momentum; their cessation of selling activity is anticipated by Adler to reduce available stocks on the market and thus decrease demand overall.
Reduced supply often marks the beginning of a new market cycle and a phase of stabilization, suggesting an optimistic outlook for cryptocurrency. A surge in Bitcoin demand combined with this limited supply could cause an impending supply squeeze that leads to even further price drops in short order.
Adler also notes that since Bitcoin’s price peaked near $60,000. long-term holders have sold off approximately 1.715 million BTC since distribution phase ended, yet market has started stabilizing and increased accumulation from long-term holders has begun, signaling potential recovery in Bitcoin’s value.
Decline in Bitcoin Sales Pressure Across Exchanges
Even as Bitcoin prices decline, investors and traders remain optimistic. Adler has observed an evident reduction in active selling by long-term holders on various cryptocurrency exchanges.
Furthermore, monthly average inflow to exchanges has seen a substantial reduction – falling from 3.8% to about 1.4% annually – suggesting less selling activity and therefore reduced downward pressure on Bitcoin prices. This development bodes well for future Bitcoin price trends.
As of today, Bitcoin stands at $81,995, reflecting an over 5% decline over the last 24 hours. Meanwhile, trading volume increased over 24% indicating increased investor interest to capitalize on recent price changes.
