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Bitcoin‘s recent price movements have sparked a sense of cautious optimism among investors.
Current Situation in Bitcoin
Throughout the previous week, Bitcoin comfortably maintained its position above $27,000. However, allegations directed towards Binance and Coinbase reignited concerns about the integrity of the industry and brought into focus regulatory intentions to tighten control over the crypto sector.
The leading cryptocurrency experienced a sudden crash on Monday, dropping to approximately $25,500 in response to a lawsuit filed by the Securities and Exchange Commission (SEC) against Binance for allegedly violating securities laws. Yet, Bitcoin exhibited a swift recovery, demonstrating resilience, and rose to a price of $27,390 on Tuesday as traders dismissed the SEC‘s move.
Early today, on-chain analysis firm Glassnode shed light on the market’s reaction to increasing regulatory pressure. Notably, despite significant fluctuations triggered by intensifying regulatory reviews by US authorities, Glassnode pointed out that realized losses recorded on the chain remained relatively low at $112 million.
The firm shared the following tweet:
This remains $3.05B (-96.5%) smaller than the largest recorded capitulation event and indicates a growing degree of flexibility among market participants.
Famous Analyst Focuses on Long Term
Cryptohell, an analyst from Cryptoquant, emphasized impressive long-term holder responses amid negative news surrounding Binance. In a tweet, the analyst used two indicators, Exchange Inflow Spent Output Age Bands and Exchange Inflow Spent Output Value Bands, to identify investors responsible for the short-term correction in Bitcoin price.
According to the analysis, long-term holders with a holding period of more than one year did not make significant sales. Instead, those with a holding period of 3-6 months, daily traders, and volatile weekly traders were identified as current sellers.
The expert concluded that long-term holders continue to maintain the Bitcoin supply, leading to speculation that they may be preparing for the expected halving event in 2024.
However, despite Tuesday’s revival, Bitcoin’s troubles seem to have worsened with the SEC requesting a court to temporarily freeze the assets of Binance US. This situation led to Bitcoin experiencing another decline on Wednesday, with crypto analyst Material Indicators tweeting:
As predicted, yesterday went by. Today, FUD continues to revive PA in the market.
The analyst then shared his analysis, stating that Bitcoin is currently retesting the 200-Week Moving Average (MA). However, liquidity seems relatively low at this level. According to him, if the 200-Week MA cannot hold, a retest of the 50-Month MA, where both liquidity and sentiment show more strength, is anticipated.
However, the expert warned investors to prepare for possibilities, stating that a sudden price drop to $25,000 could potentially pave the way for a bearish market sentiment. According to CoinMarketCap data, at the time of writing, Bitcoin was trading at $26,384, a decrease of 0.27% in the last 24 hours.
