Crypto

bitcoin [BTC] It manages to stay above $20,000 despite recent liquidations and strong outflows

If you have followed or even invested in crypto closely, chances are you are wondering if the last bearish cycle is over. The truth is that the market remains unpredictable, especially in the long run. Despite this, here are some opinions and observations that will allow you to better understand the current state of the market.

Recently, we have seen strong selloffs in bitcoin. [BTC] Space. Some investment companies that dabbled in bitcoin, such as Celsius, went bankrupt during the latest crash. The bear market liquidated many highly leveraged positions. Companies like Tesla that recently invested in BTC have dumped their holdings.

Assessment of market prospects

Despite the strong outflow, Bitcoin still managed to quickly recover above $20,000. The recovery has demonstrated the strength of Bitcoin despite testing resistance in highly volatile and detailed market conditions. Could this result be a sign that the market is ready for a bigger rally?

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A review of some of the metrics can help give a clearer picture of the current position of BTC. For example, addresses containing more than 100 BTC have reduced their sales. The number of such addresses has increased since mid-June, which has provided a bullish run for Bitcoin.

A slight decline in the same indicator over the past few days indicates the possibility that the accumulated selling pressure may prevent further gains in the short term. Selling BTC on exchanges was all over the place during the month, but outflows and inflows were relatively balanced. However, the total number of addresses metric shows that the number of addresses has grown steadily over the past 30 days.

However, over the past few months, the balance on the exchanges has been declining. This is a good sign when it comes to Bitcoin’s long-term performance. This highlights strong demand at lower price levels. Thus, investors took advantage of falling prices. However, higher generated balances may occur on some exchanges due to long-term increases in trading volumes.

The Risky Nature of Bitcoin and the Fed

It’s no secret that most large Bitcoin investors consider it a risky asset. This means that they sold or stopped selling BTC when the US Federal Reserve started raising rates. If this trend continues, we will likely continue to see increased pressure from bitcoin sellers. A more flexible approach to interest rates could further support growth.

While the Fed has a chip on BTC’s leverage, other factors will influence its short and long term performance. Regulation and investor sentiment continue to have a significant impact on BTC performance. For example, favorable cryptocurrency laws from the SEC may favor crypto bulls. The fact that the market bottomed out recently is also a good sign, and the improvement in investor sentiment since June could encourage more buyers.

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