CoinShares Chief Strategy Officer Meltem Demirors believes that most long-term holders are not selling their BTC despite the recent Bitcoin price drop. Consider this a correction to weed out panic sellers.
Speaking to CNBC, Demirors stressed that Bitcoin is here to stay and that, after 200 days of expansion in the cryptocurrency market, it is normal for the price to fall. “You cannot have a figure that goes up forever,” he added.
“What we are seeing is a correction, a contraction, and much of what is shaking is what we call the paper hands, the weak hands.”
“Weak Hands” is a popular market term to describe an investor who cannot bear high financial risk. And, it starts selling as soon as the asset’s price starts to go down. It is the opposite of “diamond hands”, which simply means an investor holds his position despite being at a loss.
An opportunity with Bitcoin, only for the eyes that can see it
The chief strategy officer at digital asset investment firm CoinShares pointed to transaction activity on the Bitcoin blockchain to support her opinion.
“There are a lot of retailers that came in, they didn’t investigate, and now they are selling. There are not many long-term forks selling. If we look at the activity on the chain, the long-held portfolios have actually been taking advantage of this opportunity to accumulate. ‘
Demirors’ comments on CNBC follow a wild ride for Bitcoin on Tuesday, which began with a sharp drop below the key $ 30,000 support level before recovering into positive territory for the afternoon. Analysts had been watching the $ 30,000 level after the cryptocurrency experienced a series of losses in May.
Bitcoin price at the limit of bottoming out?
For their part, there are those who think that the price of Bitcoin is “very close to the bottom.” And, he still has a long-term bullish view. According to the institutional cryptocurrency company Stack Funds.
In his latest report, released on June 23, analyst Lennard Neo claims that despite falling prices, there is no reason to be bearish on BTC.
The report came the day after the price of Bitcoin was reported to have plunged below $ 30,000 for the first time in six months. However, a short time later it managed to rally to current levels above $ 34,000.
The volatility came about thanks to a mining shakeup that is said to see hashing power being transferred en masse from China to other countries.
“Bitcoin also closed lower, down 28% after failing to break the $ 42,000 mark at the end of last week. Since then, the digital asset has regained some ground. After a brief drop in prices yesterday and is currently trading around $ 34,000, “summarized Stack.
“Our macro view remains the same as we expect Bitcoin to set the stage for further consolidation.”
Neo highlighted an important date looming in the near term: the expiration of second-quarter options in the last week of June. With a value of $ 2.3 billion, this should allow consolidation of the price once processed.
Bitcoin is about to post its worst quarter since the start of the 2018 bear market
The current quarter is also on track to be the second worst on record for BTC in the nearly eight years since the start of 2014.
According to cryptocurrency data aggregator Skew, Bitcoin is currently down nearly 46% for the quarter. Making it the weakest quarter since the first quarter of 2018. When it lost roughly 50% of its value in just three months amid the fall from the all-time highs of 2017.
Bearish sentiment strengthened Monday after the People’s Bank of China reiterated its ban on crypto banking in the wake of the Chinese government’s crackdown on crypto mining. Bitcoin extended the previous week’s sell-off, hitting five-month lows. close to $ 29,000 in the early hours of Tuesday, yet prices had recovered to $ 34,000 by the end of the day. With the rapid recovery, Bitcoin has re-entered the wide $ 30,000 to $ 40,000 range established after the mid-May sell-off. Bitcoin options worth more than $ 2 billion will expire on Friday. Monthly maturities have gained prominence this year as volatility inducing events.