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Crypto Potato 2025-02-04 11:09:32

Bitcoin’s 7% Holder Losses Raise Bull Market Concerns, But History Suggests Otherwise

The cryptocurrency market experienced a significant selloff following US President Donald Trump’s announcement of new tariffs on imports from Canada and Mexico, along with threats of increased duties on goods from the European Union. This triggered billions in liquidations, with Bitcoin briefly dropping below $92,000 while altcoins suffered even steeper declines. Although the market has posted a modest rebound, fears about the bull market losing momentum have surfaced. However, recent data indicates that this may simply be another routine shakeout and “isn’t out of the ordinary.” Crypto Shakeout or Bull Market Breakdown? In its latest market update , IntoTheBlock revealed that Bitcoin’s recent sharp decline has pushed 7% of holders into a loss. In previous cycles, BTC experienced multiple pullbacks, with the percentage of underwater holders approaching or slightly surpassing 10%. These events, however, failed to derail the broader uptrend. It is important to note that the true mid-cycle slump only began when this figure crossed the 20% threshold, as per the on-chain analytic platform. Even during the 2017 bull market, Bitcoin witnessed several steeper corrections but continued its upward trajectory. As such, ITB stated that this week’s drop fits within the historical norms of bull market volatility. “So while it’s wise to stay alert, today’s drop isn’t out of the ordinary. Keep the bigger picture in focus.” Market Cleanse Meanwhile, CryptoQuant analysis revealed that the market has undergone a significant cleansing following a sharp drop in Bitcoin’s price. The latest market shock rivals the intensity seen during the FTX collapse and the COVID-19 crash, which highlighted the overconfidence that had built up among investors. The sudden breakdown in open interest trends depicted the extent of the disruption, as it marked the first such event since August of last year. Interestingly, despite the panic-induced sell-off, the Coinbase Premium Gap (CPG) data indicates aggressive buying activity, which essentially points to the fact that institutional players or whales are absorbing the excess liquidity. While market sentiment remains fragile and heightened volatility is expected, this aggressive accumulation hints at a potential reversal, as large investors often capitalize on such downturns to strengthen their positions. The post Bitcoin’s 7% Holder Losses Raise Bull Market Concerns, But History Suggests Otherwise appeared first on CryptoPotato .

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