The Current Correction In Bitcoin Is The Last Before A Major RallyHeres Why
Bitcoin price momentum has grabbed significant attention as it gradually sheds some of its gains acquired in the past weeks.
So far, Bitcoin has plunged 7.6% from its all-time high (ATH) of $99,645 seen last week. Particularly, at the time of writing, the asset trades for $92,476. Marking roughly 4.6% drop in the past day alone.
What To Expect From This Current Bitcoin Decline
Amid the ongoing correction in Bitcoins price, a recent analysis from CryptoQuants BaroVirtual has highlighted the steady decline in Bitcoin reserves across major crypto exchanges. According to the analyst, this pattern indicates a market amid a bull run.
The analyst drew parallels with the March to November 2020 period, noting that exchange reserves saw a similar decline back then, followed by substantial inflows in December 2020 that fuelled upward buying pressure.
The conclusion? The current dip in exchange reserves suggests that participants who missed earlier accumulation opportunities may now be entering the market before the next price surge.
BaroVirtual noted:
Some market participants who have not properly accumulated Bitcoin earlier are likely doing so now, realizing that this is likely the last downward correction before another upward price surge.
Retail Traders Yet to Join The Market
Meanwhile, although institutional investors and high-net-worth individuals seem to dominate the current market, retail traders appear to be lagging.
Another CryptoQuant analyst known as Woominkyu has shed light on this trend, noting that the Korea Premium Indexa key metric for retail involvementremains below -0.5. This figure highlights limited activity from retail participants in the ongoing rally.
According to Woominkyu, the Korea Premium Index has historically shown spikes to extreme levels preceding Bitcoins price peaks. He emphasized that monitoring this index could provide vital insights into identifying potential market tops.
It is worth noting that the absence of retail traders in the recent crypto rally is quite noteworthy, as their eventual participation could lead to heightened buying pressure and potentially drive Bitcoins price higher.
At the time of writing, the crypto market is facing a bloodbath, with the global crypto market cap valuation sipping by nearly 6% in the past day to a current valuation of $3.34 trillion.
According to data from CoinGlass, in the past 24 hours, 206,491 traders have been liquidated, with the total liquidation of the crypto market is roughly $624.99 million.
Featured image created with DALL-E, Chart from TradingView
Source: NewsBTC.com
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Text source: Crypto Breaking News
