Bitcoin[1] recorded a sluggish performance this week, with the crypto’s 7-day chart mostly painted in red. The aforementioned depreciation ignited several speculations in the market regarding what is to come next. As always, the crypto-community’s opinions are diverse.
While some believe a trend reversal might happen in the coming days, several reports suggest otherwise. At the time of writing, Bitcoin was trading at $20,010, having fallen by over 5% in the last 7 days alone. It had a market cap of over $384 billion too.
Bears at play
Recently, Dan Lim, an analyst writing[2] for CryptoQuant, pointed out in his analysis that the possibility of Bitcoin falling further is high due to several international reasons. In doing so, Lim highlighted quite a few bearish market conditions that may contribute to the same.
According to the analyst,
“When a bear market starts, most people continue to buy without realizing that it’s a bear market. But if the bear market lasts for a long time, most people get tired and stop buying.”
The prediction seems true, as several metrics supported the possibility of a further downtrend in Bitcoin[3]’s price . For instance, Bitcoin supply in profit hit this month’s lowest level on 28 August after moving south since mid-August.
Source: Glassnode
Moreover, the MVRV Ratio also declined, suggesting a bearish market. This might just be a good opportunity for investors to buy.
Source: Glassnode
Lately, Bitcoin withdrawals from exchanges have also reduced considerably, indicating a similar bearish trend.
Easy OnChain, another CryptoQuant author, mentioned[4] that this development suggested that the price levels are not yet considered for long-term accumulation. This may be a sign of a further plunge in Bitcoin’s price in the coming weeks.
As the previous
