Is Bitcoin’s crypto rally a good sign for the market?

After the sell-off in early May, the cumulative trend of the cryptocurrency market has changed somewhat. Only long-term Bitcoin holders remain. Follow Glassnodethis accumulation signal that Bitcoin may fall deeper than it is now when the price of this digital currency corrects below 30,000 USD.

Cryptocurrency market is in the red because of LUNA

According to data from CoinMarketCapBitcoin price started to increase on May 28, touching 32,189 USD on May 31st. After that, Bitcoin had a massive sell-off, causing the price to quickly hit the mark 29,651 USD on 2/6 and then slightly recovered. The largest digital currency in the market is trading around the milestone 29,995 USD/dong on the afternoon of June 2 (Vietnam time).

Prior to that, the S&P 500 was up 7.4% from its weekly low and the NASDAQ was up 9.6%. Ethereum, the 2nd largest cryptocurrency in the market also had a week in the red. According to data from CoinMarketCapthe price of ETH fell to the level of 1,700 USD before recovering in the direction of Bitcoin’s volatility. 16:30 on June 2 (Vietnam time), ETH is trading around the milestone 1,826 USD/copper.

Follow Glassnode, the collapse of LUNA caused holders to change their Bitcoin accumulation behavior. On-chain data (on-chain analysis) shows that wallet addresses with less than 100 BTC and over 10,000 BTC are the ones who continue to buy more Bitcoin. In contrast, other wallet addresses have turned neutral.

The above data shows that investors’ Bitcoin accumulation behavior has changed compared to 3 months ago. At the same time, activity on the blockchain is quite low. Follow Glassnode, which shows that long-term investors are willing to accept the Bitcoin price halving. They also don’t sell off even if they have a loss.

Only long-term investors remain

The fact that the market has been in the red for the past few months has caused investors’ transactions to decrease. This is typical of a bear market, similar to previous times. After the sell-off in May 2021, investors sold out of digital assets and there was a “purge” of wallets.

On-chain data shows a sideways market after the May crash, bringing wallet growth to a halt in the short term. Although not falling as sharply and quickly as May 2021, the cryptocurrency wallet chart is also forming a similar sideways trend in the past.

Follow Glassnode, during high volatility events like Terra’s crash, transactions on the blockchain increase. Investors panic, sell or move cryptocurrencies to enter margin and buy positions.

In March 2020 and November 2018, the sell-offs sparked further bull runs. However, the market is trending back to September 2021. In other words, the recent sell-off and current price levels have not yet attracted new investors to the market. Currently only long-term holders remain.

Bitcoin needs correction to continue growing

Noelle Acheson, market analyst at Genesis Global Trading, thinks that when the Bitcoin price crosses the threshold of a bull cycle, the crypto market will have a correction.

“In the two previous corrections, the market showed signs of cooling off. However, in this cycle, even with a massive sell-off, Bitcoin price is unlikely to drop as deeply and accumulate as long as it does. previous times,” Acheson said.

Based on the average return over the past 3 years, researchers think Bitcoin can hit the cap mark 5 trillion USD at the beginning of 2024. This is the result based on Bitcoin’s 103.5% average growth rate per year.

Leah Wald, CEO of Valkyrie Investments, said that investors tend to sell off Bitcoin after the cryptocurrency’s price hits a new high to take profits.

“Bitcoin Price Will Likely To Reach 80,000 USD. Thinking more optimistically, BTC price is also likely to peak at 100,000 USD“, commented Leah Wald.

Besides, some strategists also expect Bitcoin price to rise to 100,000 USD based on BTC price chart technical analysis. Fundstrat Global Advisors analyst Tom Lee predicts Bitcoin price could hit the mark 168,000 USD.

The information about cryptocurrencies in the article is not investment advice from zing News. Cryptocurrency investment activities are not recognized and protected by Vietnamese law. Cryptocurrencies always carry many financial risks.