The Bitcoin bull cycle is still far from over with many large Bitcoin investors selling, as the market is entering a period of price correction, according to on-chain analytics platform CryptoQuant.
Bitcoin, the world’s largest cryptocurrency by market capitalization, may have now entered into a period of price correction after the price reached an all-time-high of $73,000. Bitcoin price may test $58,000-$60,000 range.
“However, in spite of this price correction, the Bitcoin bull cycle is still far from over as shown by the relatively low level of investment flows from new investors and as price valuation metrics are not yet near levels consistent with past market tops,” said CryptoQuant.
Several metrics reached overheated levels as the token reached $73,000 this month on March 14 and hit a low of $61,700 on March 19. The price correction occurred as traders started selling to realize extremely high profit margins.
“Large Bitcoin holders started selling more aggressively as prices went above $70,000. Large holders transferred 567,000 Bitcoin or 35% of total transfers on the network when Bitcoin reached its all-time-high price on March 12,” said CryptoQuant.
Longterm Bitcoin Bull Cycle Far From Over
“On a longer-term perspective, the Bitcoin bull cycle is still far from over as shown by the relatively low level of new investment flows,” said the firm.
CryptoQuant data shows 48% of Bitcoin investment is coming from short-term holders, while the bull cycle typically ends with 84%-92% of investment from these type of holders. The firm goes on to explain that it is worth noticing the market has reached levels similar to mid 2019 (52%), when Bitcoin also experienced a meaningful correction.
On Wednesday, Bitcoin price jumped in the wake of the latest Fed policy announcement, which saw the bank leave interest rates unchanged at 5.25-5.5% for a fifth successive meeting and continue to forecast three rate cuts in 2024. Bitcoin was trading in the mid-$67,000s, up around 9% daily. The BTC price has bounced over 10% from earlier session lows under $61,000.
“Bitcoin that hovered around all-time-high was an ideal candidate to sell. On Wednesday, the FOMC [The Federal Open Market Committee] presented a surprisingly positive perspective, stock prices surged and crypto-currencies followed to a lesser extent,” Basile Maire, the co-founder of D8X, a derivatives DEX, told Cryptonews.
Maire explains with Switzerland decreasing interest rates as a first mover, and better-than-expected inflation data in Europe, many think that the European Central bank will follow suit.
“This makes the Fed look hawkish and strengthens the Dollar. With a stronger Dollar, assets denominated in USD must decrease – all else equal. Bitcoin that has not fully recovered from its initial sell-off, now suffers again and gets closer to $60,000,” adds Maire.
Markets appear to be rallying amid relief that, despite recent hotter-than-expected US inflation figures and activity data, the Fed is set on cutting interest rates three times later this year, reports Joel Frank from Cryptonews.
On Friday, Bitcoin was trading around $66,200.
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