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A violent sell-off hit the cryptocurrency market again on Monday December 13th as bitcoin dropped below $ 47,000. At press time, bitcoin has failed to recover from Monday’s lows and is currently trading at $ 46,712 with a market cap of $ 880 billion.
Despite the fact that the price of bitcoin is under pressure, the supply of bitcoins on exchanges is declining, reaching a 31-month low.
According to @santimentfeed, the supply of bitcoin on exchanges hasn’t been that low in 31 months. Prices have been volatile lately, but the lack of BTC coming to exchanges is a positive sign that there won’t be a major sell-off, Santiment said.
🤯 #Bitcoin’s supply on exchanges hasn’t been this low in 31 months, according to @santimentfeed data. Prices have been volatile as of late, but the lack of $BTC moving to exchanges right now is a positive sign that major selloff risk should be limited. 👍 https://t.co/IIAVoVGN6L pic.twitter.com/XShAft45Db
— Santiment (@santimentfeed) December 13, 2021
Many compare the recent sell-off in the market to the fall in May 2021, as the price of Bitcoin (BTC) has corrected nearly 40% from its all-time high of $ 69,000. Crypto market analyst Will Clementele noted one key difference between the May correction and the current correction:
During May, strong hands were selling off assets en masse, this time strong hands are buying.
From an on-chain perspective, here’s the key difference between now and May:
In May: Previously strong hands became weak hands
Now: Strong hands buying from weak hands pic.twitter.com/kMe75YN732
— Will Clemente (@WClementeIII) December 14, 2021
As a result of the recent price correction, major long positions in bitcoin futures have been liquidated, suggesting a kind of reboot. Additionally, based on the buy / sell heatmap, cryptanalyst Willie Wu wrote that the fall was clearly visualized.
Visualization of purchases on failure (spot volumes displayed on the network). Most importantly, there are no signs of a further cascade of sell-off so far. It should also be borne in mind that long positions have already been washed away.
As retail investors continue to feel anxious, data online hints at fundamental strength, but whether this will result in a good pullback or not remains to be seen.
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