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

Posted: September 2, 2023

• Bitcoin erasing current good points might 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 good points. Nevertheless, the present market dynamics could have raised issues about the potential for losses. However which may solely be the case if traders determine to build up the coin for the brief time period. 

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

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

Not the proper time to push for good points

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

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

Supply: CryptoQuant

Nevertheless, the metric had decreased, indicating the beginning of one other BTC value lower. Beforehand, Bitcoin had reached $28,000 on account of Grayscale’s win in courtroom. 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 typically acts as assist or resistance, sunmoon concluded that:

“The current breakdown within the realized value of short-term holders has led to a downtrend, and the realized value 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

One more reason, BTC might fall once more could possibly 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 an alternative, miners’ transfers to identify trade have been rising for some time. The analyst famous that:

“In current occasions, each main or minor value drop has occurred whereas miners had been sending their Bitcoins to SPOT exchanges. This motion, after all, elevated the promoting strain, ultimately main them to promote available on the market.”

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

Is your portfolio inexperienced? Try the BTC Profit Calculator

Most occasions, the promoting actions embrace the fast have to cowl the associated fee or to make extra good points by promoting on the value 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, dropping 4.64% of its worth within the final 24 hours.