Bitcoin price recovered over 90% in the past few weeks. This week, we even managed to stay above $7,000 only to drop back to below $7k to as low as $6,857.
Following Bitcoin, altcoins fell harder, wiping out nearly $12 billion from the overall market cap.
The March’s price decline resulted in BTC price touching the lower historical trendlines. Now, it is at a “significant discount” to the historical trend in the stock-to-flow model.
However, this drop in price didn't come as a surprise as industry experts and commentators have been already calling for another drop.
“I wouldn’t be surprised if “real” traders are pulling out from Bitcoin to get some gains from the stock market right now and then – take those gains and put them back into Bitcoin,” said Republican Candidate and Forbes Council Member David Gokhshtein.
Actually, it is possible we can go even lower as analyst The Cryptomist said, “Expecting this to go much lower!”
Trader Credible Crypto is also “hunting for longs on this pullback” to $6,600.
Starting to look like garbage.
Lost a significant trendline, but holding crucial area between $6,750-6,850 here.
Holding there could imply a test of the yearly level around $7,200.
However, losing this zone and I'm targeting $6,300 and $5,800 next. pic.twitter.com/WwvosKgWla
— Crypto Michaël (@CryptoMichNL) April 10, 2020
A lot of funds have also been moved into exchanges like Binance, Bitstamp, OKEx today that put fear for another sell-off. As per Crypto Fear and Greed Index, the sentiment has slightly uplifted, from 8 on March 28 to 22 on April 9 on a scale of 1 to 100, but they are still in “extreme fear.”
Equity markets had their best week since 1974 amidst the historic jobless claims, going to nearly 17 million, and the Federal Reserve firing yet another bazooka of $2.3 trillion in response to coronavirus hit businesses.
However, experts are saying that this could be nothing but a bear squeeze which means we could revisit new lows. This means the Bitcoin and crypto market could still see another big drop.
According to Credible Crypto, 5,300 is the lowest we would go.
Whales accumulating Bitcoin
As we reported, the futures market for bitcoin has gone back to normal, with premium now positive across all platforms. The retail platforms are actually seeing a strong bounce in premium but CME traders still are more bullish.
On-chain fundamentals also grew this week, especially volume which increased by 23%. The total number of active entities saw an increase of 4.7%, indicating growth in overall on-chain economic activity.
Also, as we reported, the number of bitcoin whales, entities with at least 1000 BTC increased to the levels not seen since the top of the market in late 2017, but it was during the capitulation phase meaning whales were selling. The last time, Bitcoin whales were rising during an accumulation phase was in early 2016.
This ongoing increase in whales led up to last month’s market crash and only accelerated during and after the crash.
“This suggests that larger market players are accumulating BTC, providing an optimistic sign,” states Glassnode.
Now, when compared to halving, the trend implies that “despite an uncertain market environment, whales remain confident that now is a good time to be accumulating BTC, suggesting that they believe there is further room for growth.”