Buying Bitcoin now could result in a loss- Here’s why

Posted: September 2, 2023

• Bitcoin erasing latest positive factors will not be the top of a short-term downtrend.
• Miners have additionally been promoting, indicating that respite could not seem anytime quickly.

Investing in Bitcoin [BTC] has lengthy been related to potential positive factors. Nevertheless, the present market dynamics could have raised issues about the potential for losses. However which may solely be the case if traders resolve to build up the coin for the quick time period. 

Learn Bitcoin’s [BTC] Price Prediction 2023-2024

For on-chain analyst crypto sunmoon, these optimistic about BTC’s worth motion may have to contemplate the Quick-Time period Holders’ (STH) realized worth, as an alternative of dashing into a choice. 

Not the suitable time to push for positive factors

sunmoon, who published his opinion on CryptoQuant, opined that Bitcoin may very well be set for an additional leg down the charts.

The STH realized worth is the common worth of the STH holder BTC provide, valued on the day every coin final transacted on-chain. Usually thought-about as the fee foundation for short-term holders, a rise within the metric or flip over the Lengthy-Time period Holder (LTH) realized worth suggests an uptrend.

Supply: CryptoQuant

Nevertheless, the metric had decreased, indicating the beginning of one other BTC worth lower. Beforehand, Bitcoin had reached $28,000 on account of Grayscale’s win in court docket. Sadly, the hike solely lasted a while, because the coin appeared very near the worth it was earlier than the rally.

And since the STH realized generally acts as assist or resistance, sunmoon concluded that:

“The latest breakdown within the realized worth of short-term holders has led to a downtrend, and the realized worth of short-term holders is appearing as sturdy resistance. The downtrend is more likely to proceed for a while, so those that purchase early are more likely to lose cash.”

Miners take a share of the blame

Another excuse, BTC may fall once more may very well be linked to the actions of miners. IT Tech, one other pseudonymous analyst on CryptoQuant explained that the promoting strain was restricted to traders alone.

As a substitute, miners’ transfers to identify trade have been rising for some time. The analyst famous that:

“In latest occasions, each main or minor worth drop has occurred whereas miners had been sending their Bitcoins to SPOT exchanges. This motion, in fact, elevated the promoting strain, finally main them to promote available on the market.”

In coming to the conclusion, IT Tech used the seven-day Shifting Common (7-day MA) miners’ pockets to trade metrics. Miners’ transferring their cash to the exchanges consists of the needs of promoting to cover the cost or to arrange for potential sale. 

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Most occasions, the promoting actions embrace the rapid must cowl the fee or to make extra positive factors by promoting on the worth they contemplate to be over-valued.

Supply: CryptoQuant

From the chart shared above, there have been quite a few spikes on a number of events. This was affirmation of miners’ intent to promote BTC. At press time, Bitcoin was again under $26,000, shedding 4.64% of its worth within the final 24 hours.