Bitcoin‘s sharp drop following its surge to a new all-time high led to significant challenges for investors and traders, especially BTC’s short-term holders. However, with BTC regaining its upside momentum, the market might become favorable for institutional and retail investors in the upcoming days.
Price Movement Poses Challenges For Short-Term Holders
Technical expert and host of the Crypto Banter Show Kyle Doops has spotted a persistent trend among Bitcoin’s short-term holders. Data shows that the short-term holders are grappling with profitability challenges as fluctuating prices and shifting market dynamics take their toll.
On-chain data shows a growing percentage of these investors are holding at or close to a loss, underscoring the rising difficulties of profiting from the movement of BTC’s price. This extended struggle of these short-term holders could lead to profit-taking, thereby hindering BTC’s upward momentum.
Kyle Doops highlighted that these investors are struggling with profitability due to BTC’s sharp drop from its current all-time high of $108,000. According to the expert, this group has a significant impact on market sentiment, and their lower profitability suggests weakening demand and pessimistic conditions.
As a result, corrections are more likely at this point as volatility increases. Meanwhile, Kyle Doops believes that even if Bitcoin’s potential for long-term growth is still intact, now is a good time to concentrate on risk management. With Bitcoin approaching key resistance levels, market watchers are closely observing the impact of the trend and BTC’s price movement in order to navigate the next major upswing.
The development coincides with Bitcoin’s recent upswing to the $102,000 price level, signaling the potential for more growth. There are rising speculations within the community that the recent move marks the beginning of a price discovery phase.
Daan Crypto Trades, a market expert and investor, claims that BTC’s price discovery phase has barely begun after examining the price action. His perspective is also backed by past cycle trends where Bitcoin witnessed substantial growth during its price discovery phase.
Thus, the expert contends that the market is currently in the first full week of the year following the Halving event, which is usually the most bullish year of the cycle. This move marks a pivotal moment for the flagship asset as investors anticipate its move toward its all-time high.
Bitcoin Maintaining A Positive Move
BTC is presently maintaining a healthy price movement after its latest surge, attracting gains in the last few days. Investors’ and traders’ sentiment has risen sharply due to the move, indicating heightened optimism in BTC’s prospects.
At the time of writing, Bitcoin was trading at $101,790, demonstrating a nearly 3% surge in the last 24 hours. Its market cap and trading volume have also increased by about 2.43% and 70% in the past day.
Featured image from Unsplash, chart from Tradingview.com
