- After the previously observed consolidation, the collapse resulted in prices falling below $27,000 and resulted in a significant gain for short sellers.
- The price increased pressure when it failed to react from the long-term support level of $29,000. This indicated the collapse of investor confidence after a period of low volatility and sideways price movement.
- The selling pressure was initially triggered by long position liquidations after the collapse. We observed that long position liquidations have been higher than short position liquidations since August 15.
With the contribution of whales, selling pressure intensified in the recent drop in Bitcoin price; will BTC be able to recover quickly?
Deep Drop in Bitcoin Price Triggered Concerns
Bitcoin completed the week with the return of strong volatility, which supported the bears. After the previously observed consolidation, the collapse resulted in prices falling below $27,000 and resulted in a significant gain for short sellers. So, let’s take a look at what happened.
Firstly, let’s look at the latest price movement of Bitcoin. The price increased pressure when it failed to react from the long-term support level of $29,000. This indicated the collapse of investor confidence after a period of low volatility and sideways price movement. The selling pressure intensified in the last 24 hours, and BTC dropped by 8%. BTC is currently trading at $26,440 during the writing of this article. This sent the price into oversold territory.
The selling pressure was initially triggered by long position liquidations after the collapse. We observed and confirmed that long position liquidations have been higher than short position liquidations since August 15. In the last 24 hours, long position liquidations exceeded $329.82 million, while short position liquidations were $112.84 million.
Long position liquidations significantly contributed to the selling pressure in Bitcoin. However, there was another significant reason behind the selling pressure. The situation indicates that Ripple was the main factor at the center of the recent market collapse. Bitcoin holders became concerned after news that they were given the right to appeal the previous decision in favor of Ripple.
Can Bitcoin recover as quickly as it collapsed?
As mentioned earlier, Bitcoin is currently in a position where it is facing overselling. This alone can trigger a wave of psychological buying pressure. The significant discount also meant that investors would want to take advantage of the lower price tag, which could explain the slight increase observed from the lowest price point.
According to some arguments, the recent drop could be the last major correction before Bitcoin starts another major rally. Although this has not been seen yet, it is clear that some whales have already taken advantage of the drop.
Addresses holding over 10,000 BTC (shown in yellow) are increasing their balances while the selling pressure continues. This address category currently controls approximately 11.79% of Bitcoin’s circulating supply.
At the same time, some whales (shown in blue) with holdings between 1,000 and 10,000 BTC have contributed to the selling pressure. This whale category controls approximately 24% of BTC supply, hence the widespread selling pressure. Approval of a Spot Bitcoin ETF could be the next “hope of salvation” for Bitcoin holders.
