Talk of a price plunge grows! Bitcoin is doing another one of its sideways movements this week, but crypto analysts are already weighing in on whether we are on the cusp of something big.
As in, a big drop.
Bitcoin conditions, they say, are similar to the second half or later stages of a bull market. This insight comes from the Glassnode weekly analysis report, which signals nervousness growing in some quarters about the fall in price.
The report found that there had been a pickup in wealth transfers from long-term Bitcoin holders to newer speculators. This, the company says, is reminiscent of previous market peaks.
Bitcoin bull markets have a tendency to reach a euphoric top that materializes as whales increasingly spend their coins to realize profits. Glassnode estimates that long-term Bitcoin holders have reactivated about 9% of supply so far in 2021 by spending coins.
Though as a comparison, this is below the 17% reactivation seen before the market crash in 2017.
Glassnode also said that the biggest players had cut their holdings by 307,000 bitcoins since December. These are wallets in possession of 1,000 to 10,000 BTC.
Bitcoin price was down 6% on Tuesday to $54,294, well off its high of $62,000 earlier in March. The value is still up 700% from a year ago.
Crypto exchange founder Bobby Lee is of the view that 2021 is a bull market for Bitcoin, the sort that comes around every three or four years. He forecasts that the price of the digital currency could potentially go as high as $300,000 this year.
Yet, at the same time, it could also fall as much as 80% to 90% of its value from the peak.
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