Bitcoin: Sharp Price Correction is no Reason to Panic, According to Analysts

The Bitcoin rally is coming to a screeching halt; BTC has currently fallen back to around $57,000 from its new all-time high of around $73,000 in mid-March. The inflow of capital through Bitcoin ETFs in the USA has come to a standstill for the time being and a certain nervousness is spreading.

At the analysis company Glassnode, the latest weekly report is all about whether there is a threat of further price corrections for Bitcoin or whether the markets will clear up and then pick up speed again.

According to Glassnode, Bitcoin continues to be in a cycle of euphoria . Because indicators such as unrealized profits compared to unrealized losses are in a healthy balance, and the MVRV (market-value-to-realized-value) rate is also in the generally positive corridor between 0.9 and 1.

Glassnode wants Using such market data, we can provide assistance in identifying early whether dynamics in the Bitcoin price curve are exhausting or reversing. However, the report published on Tuesday set a critical support line for BTC at $60,000 – and the mark has already broken.

That’s why it’s now important to observe price levels between 50,000 and 52,000 for Bitcoin, say other experts. They talk about “paper hands” among BTC investors, i.e. those who quickly lose their nerve during downward trends like the current one and sell Bitcoin.

Once these “paper hands” have been sorted out from the markets, there would be a chance that Bitcoin could return to cycles that have historically occurred several times after the halving . In short, this would mean that Bitcoin is currently consolidating naturally and setting off for new gains later in the year.

Conclusion: High volatility of Bitcoin is nothing new

Predictions about the price curve of Bitcoin often highlight data points and Glassnode is no exception. However, the analysts, for example, excluded the global economy and the persistently high US key interest rate from their Bitcoin report and thus factors that also play a role in price formation and have little to say in favor of BTC in the short term.

Experienced crypto traders have long since gotten used to the sometimes violent ups and downs in Bitcoin and trust that the mother of all cryptocurrencies will always find its way up in the medium and long term. But one thing is also clear: there is no natural law that guarantees investors profits for Bitcoin. Pessimists currently see the $40,000 mark per Bitcoin as the point at which one should base their investment strategy.

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(Featured image by sergeitokmakov via Pixabay)

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