• Long liquidations for Bitcoin (BTC) reached a seven-month high following the decline in BTC’s price on March 3.
• CryptoQuant analysts believe further drops in BTC’s price are imminent due to a large spot sale on exchanges such as Binance and an increase in coin distribution by short-term holders.
• Joao Wedson warned investors of a possible “price capitulation” if BTC’s market capitalization crosses its Delta Cap metric, an occurrence that has preceded significant drops in price three times prior.
Long Liquidations Reach Seven-Month High
Following the sharp decline in Bitcoin’s [BTC] price in the early trading hours of 3 March, long liquidations soared to a seven-month high, data from Coinglass showed. The drop in value was triggered by apprehension and uncertainty regarding Silvergate Capital, a financial institution recognized for its supportive attitude toward digital currencies. Source: Coinglass
Analysts Warn of Further Price Drops
CryptoQuant analyst caueconomy found that these long liquidations were the third since the Terra/LUNA crash in May 2022 and the second following the fallout of cryptocurrency FTX in November 2022. Another CryptoQuant analyst with the pseudonym CryptoOnchain opined that Bitcoin’s [BTC] price might drop further due to an increase in outflow of stablecoins from exchanges and lack of support from long-term holders for recent price increases. Source: CryptoQuant
Joao Wedson Warns of Possible Price Capitulation
Pseudonymous analyst Joao Wedson warned investors to gear up for a „possible new scenario of price capitulation.“ Wedson assessed BTC’s Delta Cap metric and found that a price bottom is formed when the coin’s market capitalization crosses with its Delta Cap. This crossing occurred on three previous occasions: 2011, 2015, and 2018; each time followed by notable drops in BTC’s prices. Source: CryptoQuant
Is Your Portfolio Green?
To benefit from this year’s increase in prices, an on-chain assessment revealed an increase in coin distribution by short-term holders as well. Is your portfolio green? Check out the Bitcoin Profit Calculator to find out more information about how your investments have performed so far this year.
Conclusion
The crypto market has seen an increase in outflow of stablecoins from exchanges which cannot sustain current prices leading to potential further decreases while short term holders have been buying BTC, long term holders have not supported recent increases leading analysts to warn investors to prepare themselves for “price capitulation” if it follows historical patterns with past occurrences being followed by significant drops after market capitalization crosses with its Delta Cap metric
