As the global markets continue to consolidate, the crypto space is also suffering a notable pullback. While the long-term holders seem to show confidence, panic sellers are causing more trouble by selling cryptos at a loss. Now that Bitcoin shows indications of plunging to $25,000, traders expect the price to revisit levels below $20,000.
Will the BTC price drop below $20,000?
Ever since the collapse of the Terra ecosystem back in May 2022, market participants have continued to remain in extreme fear as it triggered multiple fallouts later. The tokens witnessed a sigh of relief during the first few weeks of the year as the majority of them rallied significantly. Unfortunately, at the beginning of the second quarter, the volume dried up, slashing the volatility to its lowest levels.
Therefore, the traders who waited for a notable push towards $30,000 until now appear to remain in a state of distrust and have begun to sell cryptos at a loss.
As per the data from Santiment, more cryptos have been bought within the underbought zone, where there is very little possibility of buying. The traders now appear to be dull, as the restless addresses have been constantly dumping on Bitcoin and other assets at a loss. The MVRV model indicates that altcoins are flashing underbought signals across the sector.
Now that the crypto markets have begun a sluggish trade, the market sentiments have shifted back to ‘fear’. The net realized profit/loss (NUPL) underwent a bearish pullback, signalling the sentiments have shifted from ‘Optimism/Anxiety’ to ‘Hope/Fear’.
Collectively, the market participants have again developed fear as the crypto markets consolidate within narrow regions. While the Bitcoin (BTC) price is hovering just above $26,000, the altcoins have been bleeding heavily. Therefore, indicating a more bearish trend may be imminent in the succeeding days.