Bitcoin crash to $104K was ‘flush’, not crypto cycle ‘failure’

💡 DMK Insight

Bitcoin’s recent downturn is more than just a blip; it’s a signal that long-term holders are starting to capitulate, which could reshape market dynamics. This selling pressure is crucial because it indicates a potential shift in sentiment among investors who typically hold through volatility. If these holders continue to offload their BTC, we might see further price erosion, especially if the asset breaks below key support levels around $25,000. For traders, this means keeping a close eye on on-chain metrics like the Realized Price and the number of active addresses. A sustained drop in active addresses could suggest waning interest, while a spike in selling volume could trigger stop-loss orders, leading to cascading effects. Additionally, watch for correlations with altcoins; if Bitcoin’s price continues to slide, altcoins could face similar pressure, particularly those with high beta. The broader macroeconomic landscape, including interest rate decisions and regulatory news, will also play a role in shaping market sentiment. As we approach the end of the month, liquidity could tighten, amplifying volatility. So, be prepared for potential swings as traders react to both technical signals and external economic factors.