Week in which the BTC price drop has been considerable around 30%, there are mainly two causes that have led to this drop:
- The news of the People’s Bank of China (PBOC) to prohibit financial institutions from providing services related to virtual currencies, which is added to the famous tweet of last week by Elon Musk, but it must be clarified that these Chinese measures do not prohibit users holding cryptocurrencies. That directive had already been announced in 2019 where they published that “access to all national and foreign cryptocurrency exchanges, as well as initial coin offerings (ICO) websites, would be blocked” but that by re-publishing it, it has put fear in the body to users causing a drop in price.
- The overbought of BTC caused by the FOMO we have been in since February of this year.
To a lesser extent, the strengthening of the dollar this week has also been able to influence the price decline.
Regarding this week’s sales, sharks, fish and crabs have been selling bitcoin by sending them to exchanges and whales and retailers (shrimp <1 BTC) that have accumulated 3507 BTC as shown in the Bitcoin coin distribution table.
The whales have taken advantage of this big drop to buy as usual and have been selling the first days and have bought in the last 3 when the price has bottomed out.
The behavior of the Shrimp has been curious since they have acted contrary to the rest of the players and more importantly they have gone against the market trend, they have bought BTC during the first 4 days which shows that the small owners believed that this decrease was something circumstantial and have sold in the last 3 where they have bought the whales, the main reason for the purchase is because many of them are selling their altcoins that are suffering a greater price drop than bitcoin and taking refuge in BTC which is a safer value.
This is shown because bitcoin’s dominance over other altcoins is increasing.
The behavior of other users shows the widespread fear that the entire market has suffered.
The indicators of the chain continue to clearly show that the current moment is ideal for the purchase of BTC with values of many of them close to 100% that indicate that when they occurred in the past then a bullish season came. For investors, the best moments to buy are moments of panic, whenever a price increase comes later.
The history of euphoria and fears in Bitcoin shows that after the fears, the big price rises have come.
In this speedometer 100% means extreme fear and 0% unleashed euphoria.
Reviewing the bitcoin flows on the exchanges we see that the total balance is positive of more than 6500 BTC which indicates that users have been sending them to sell, mainly on Binance where many retailers operate. The interesting thing that the last day has changed the trend and the amount of BTC in the exchanges has fallen by 13000 BTC which is twice the weekly rise which shows that bitcoin is being bought and supposes a rise in the price.
Summarizing the current situation is very interesting and traders should follow it very closely because we have been dragging a weekly drop of 30% and if we add the decrease in the previous week in The price of BTC is 48% and in the last 24 hours the price has risen by 7% and the whales are buying so this may mean the beginning of the bullish period that will come sooner or later.