Bitcoinโs price has dipped towards $80,000 following heavy sell-offs from dormant wallets and derivatives market pressure, highlighting significant market volatility.
The drop underscores potential impacts on key assets like Bitcoin and Ethereum, with broader market reactions indicating increased risk and volatility.
Large Dormant Wallets Trigger Supply Surge to Exchanges
Bitcoinโs price has seen a retreat toward $80K, amid dynamics involving long-dormant wallets moving significant BTC volumes to exchanges. These movements have created selling pressure, overwhelming bids and thinning liquidity at key support levels. According to FlowDesk, โWe are seeing heavy supply from long-dormant wallets, overwhelming bids and thinning liquidity.โ
Market player FlowDesk reported the surge of supply from these dormant wallets, attributing it to sustained sell pressure. Meanwhile, Deribit noted that the $80K put option now holds the largest open interest, signaling bearish sentiment in derivatives markets.
Federal Reserveโs Stance and Massive Liquidations
The price drop has triggered liquidations exceeding $1.7 billion, mostly impacting long positions. Retail sentiment has turned bearish, with significant sell pressure leading to lower support levels and potential risks to asset valuation. Bitcoin suffers flash crash to $80K amid volatile market conditions.
According to QCP, a sudden hawkish stance by the Federal Reserve further exasperated the pressure. Historically, movements from long-term holders have signaled market shifts, as seen with prior dips in bull markets.
Analysts Highlight 20-35% Pullback Patterns
Retracements similar to the current downturn are not unprecedented; Bitcoin has experienced 20-35% pullbacks in previous bull markets. Analysts indicate that these corrective phases hold potential for rebounds based on historical data patterns.
Market expert Michael Saylor frames the $80K dip as an opportunity, coining it โSatoshiโs Gift to the Faithful,โ suggesting a cultural optimism despite market turbulence. JPMorgan analysts, however, caution on index-related stock risks amid declines.
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