• BTC long liquidations reached a seven-month high following the decline in Bitcoin’s price on 3rd March.
• Analysts believe that further decrease in prices is imminent due to lack of support from long-term holders and an increase in outflow of stablecoins from exchanges.
• Joao Wedson warned investors to be prepared for a potential price capitulation.
BTC Long Liquidations Reach Seven Month High
BTC long liquidations rose to their highest position since August 2022, according to Coinglass data. The sharp decline in value was triggered by apprehension and uncertainty regarding Silvergate Capital, a financial institution recognized for its supportive attitude toward digital currencies. CryptoQuant analyst caueconomy observed that these liquidations were the third such event since the Terra/LUNA crash in May 2022 and the second following the fallout of cryptocurrency FTX in November 2022.
More Pain For BTC Holders?
CryptoQuant analyst CryptoOnchain opined that the king coin’s price might drop further as long-term holders have not supported the recent rise in prices and short-term holders have been taking advantage of it. Moreover, there has been an increase in outflow of stablecoins from exchanges which could potentially lead to a further decrease in prices. Another analyst Joao Wedson warned investors to gear up for a „possible new scenario of price capitulation.“ Wedson assessed BTC’s Delta Cap metric and found that a price bottom is formed when its market capitalization crosses with its Delta Cap, usually followed by significant drops in BTC’s price.
Signs Of A Price Bottom?
Wedson noted that while this crossing has yet to occur this time around, it cannot be ruled out as it would be the first time without this occurrence leading up to a significant drop for Bitcoin’s prices. With BTC struggling to reclaim its $25k mark, many investors are holding their breath hoping for signs of a bottom before suffering more losses than they can handle.
The Power Of On Chain Assessments
To benefit from the price growth so far this year, an on-chain assessment of BTC’s price revealed a surge in coin distribution by short-term holders as well as an exchange inflow by 1-3 month holders at its highest value since June 2022 according to CryptoOnchain. This on chain assessment helps give investors insight into where Bitcoin’s market is headed next and how best to protect themselves during volatile times like these where anything can happen even with little warning or explanation behind it.
Protect Your Investments
It is important for all crypto investors to stay aware of current events and trends within the market so they can make informed decisions about their investments accordingly; especially if they want minimal risk when investing large sums at any given time period like now when things seem uncertain at best most days for crypto traders everywhere globally no matter what part of world you might find yourself currently situated within!