Heres Why Bitcoin Crash to $80K is a Normal Correction Rather Than the Start of a Major Downtrend
Data confirms that the latest Bitcoin crash is likely the result of a natural correction rather than the start of a major downtrend.Bitcoin has again dropped below $80,000 for the second time this year, triggering panic among investors. As fear spreads, many question whether this decline signals the end of Bitcoin's bull run or if it is merely a natural correction within an ongoing uptrend.Decline in Peak Losses Shows Bitcoin in a Natural Correction In a recent analysis, Glassnode revealed that although Bitcoin revisited the low $80K range, the extent of realized losses remains significantly lower compared to previous corrections. https://twitter.com/glassnode/status/1899094068019232808For instance, during the late February and early March downturns, aggregated peak losses ranged from $592 million to as high as $933 million. However, the latest pullback saw a peak loss of just $377 million, indicating a decline in panic selling.A major change in this correction is that losses are now spreading to investors who have held Bitcoin for 3 to 6 months. In late February, this cohort only realized losses of about $2 million, but this number has now surged to $9.5 million. Meanwhile, holders from the 6 to 12-month range are showing resilience, with negligible realized losses. Instead of panic selling, they are actively distributing at a profit. On March 10, this group took $26.4 million in profits, accounting for 44.4% of all profits across different investor categories, excluding short-term traders who held for less than 24 hours.Essentially, while short-term price action could remain choppy, especially if $80K doesn't hold, the lower realized losses and continued profit-taking from older cohorts (instead of full-scale capitulation) suggest that this is likely a normal market correction rather than the start of a major downtrend.Axel Adler Jr., a CryptoQuant analyst, confirmed further. He highlighted that long-term holders had already distributed 1.715 million BTC when prices surged past $60,000. https://twitter.com/AxelAdlerJr/status/1898729875852136533However, this phase of intense selling has now cooled off, with the net position change of long-term holders returning to neutral. This suggests that large-scale exits have significantly declined, which could reduce further downside pressure.Possible Further Decline Before RecoveryMeanwhile, market veteran Michaël van de Poppe stressed that Bitcoin is seeing a lack of a decisive breakthrough in recent price action, which explains the continued downward movement. He predicted that the market would likely retest previous lows or take liquidity in that range.
Text source: The Crypto Basic
