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Worrying Signs: Is Bitcoin Price About to Plunge Further?
The recent turmoil in the cryptocurrency market has led many investors to question the stability of the sector. With Bitcoin’s (BTC) price plummeting and concerns surrounding inflation, the possibility of further declines is a growing concern.
Experts warn that rising inflation concerns and the Fed’s current policy stance could delay Bitcoin’s recovery. The cryptocurrency’s sharp double-digit losses have pushed its price below the crucial $80,000 mark, prompting short-term holders to reconsider their investment decisions.
As a result, investors are increasingly shifting their capital into more secure assets. Following Bitcoin’s decline, short-term holders (STHs) are facing immense pressure as they struggle to minimize their losses. Historically, this cohort of BTC holders tends to sell in an effort to mitigate their losses when market fluctuations become particularly volatile.
In times of heightened volatility, it is not uncommon for STHs to be the first to sell and cut their losses. Furthermore, CryptoQuant’s recent analysis has shown that previous corrections in 2024 were characterized by significant STH-SOPR drops. This metric tracks the profitability of short-term holders and often correlates with sharp sell-offs.
While the current STH-SOPR has not yet fallen to these levels, it is a worrying sign that short-term investors have not yet fully capitulated. If they do begin to sell more aggressively, the market could potentially face additional downward pressure.
The market’s attention remains focused on the $78,000 support level, which analysts believe would serve as a crucial threshold for maintaining the current market structure. Unfortunately, at the time of this writing, Bitcoin has already broken through this level.
If this threshold fails to hold, we may see further declines in the cryptocurrency’s price.
Source: https://cryptopotato.com/worrying-signs-is-bitcoin-price-about-to-plunge-further/
