Bitcoin's price plunged below $69,000, sending selling sentiment to extremes. Experts believe the market has entered a de facto bottoming phase, with fear reaching its peak and short-term holders continuing to sell.
Short-term holders sell 60,000 BTC...largest volume of the year.
On the 6th (local time), Bitcoin (BTC) fell below $69,000 (approximately 109.81 million won), hitting its lowest level since November 6th of last year. On-chain analytics firm CryptoQuant reported that short-term holders (holding for 155 days or less) deposited 60,000 BTC, worth approximately $4.2 billion (approximately 6.1563 trillion won), into exchanges at a loss over the past 24 hours. This represents the largest inflow to exchanges this year and is identified as one of the direct causes of the sharp price correction.
“We are currently in a ‘full capitulation’ situation,” said Darkfost, an analyst at CryptoQuant. “No long-term holders are moving their coins that are in profit.”
On-chain indicators simultaneously ignite "sell signals."
Glassnode, another on-chain platform, reported that the daily volume of Bitcoin transactions sold at a loss exceeded $1.26 billion (approximately KRW 1.8471 trillion) based on a seven-day moving average. This reflects a surge in fear, and it added that in the past, such sharp losses have marked a turning point for selling pressure to dry up and prices to rebound.
In particular, the 'sell-off metric', which measures the level of sell-off, showed its second-largest surge in two years, suggesting that the market has entered a period of strong risk-off.
Extreme Fear Index: A Sign of Bottoming?
The Crypto Fear & Greed Index, which measures market sentiment, hit 12 on the day, indicating "extreme fear." This is the lowest level since July 2022. At that time, the index remained in oversold territory for months before BTC prices bottomed out at $15,500 and rebounded.
“Now is a good time to buy and accumulate,” said on-chain analyst Davey Satoshi. “Past data shows that periods of extreme fear are followed by brief periods of weakness followed by strong rebounds.”
Analytics platform Santiment also said, “Investor sentiment towards Bitcoin has turned extremely bearish,” and “The more small investors turn away from the market, the greater the possibility of a short-term rebound.”
Bitcoin RSI hits lowest level since 2022 FTX incident
Technical indicators also suggest overheated selling. According to CoinGlass, Bitcoin's Relative Strength Index (RSI) is in "oversold" territory, at 18 on the 12-hour chart, 20 on the daily chart, and 23 on the 4-hour chart. The weekly RSI also hit 29, its lowest level since the FTX crash in 2022.
Cryptocurrency analyst CryptoXLARGE said, “Based on the RSI, the current oversold condition is similar to the period just before a large-scale sell-off in the past,” and interpreted it as “the more extreme the fear, the greater the opportunity.”
Analyst HoldFM also added, “Bitcoin’s current RSI is at the same level as when the low of $16,000 was formed in 2022,” and “It is not an exact timing signal, but historically, price rebounds have begun when the selling ratio is clearly tilted toward buying.”
A rebound is possible amidst short-term pain...but caution is advised.
Bitcoin has entered a short-term phase of distress, but on-chain and technical indicators are gradually approaching a "bottom" signal. However, the timing and pace of a rebound remain uncertain, so a gradual response based on market sentiment and trading volume trends is necessary, rather than over-betting.
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Short-term holders dumped 60,000 BTC, the RSI fell below 20, and the Extreme Fear Index reached 12… The market is currently in turmoil. However, past data shows that these "extremes" must have been overcome before a rebound began.
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TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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