2020 was a pretty crazy and surprising year for everyone. In the cryptocurrency world, no one expected Bitcoin to drop to the 2018 lows in a single day after a recovery and uptrend. This fall has been significant, and it’s no secret to anyone. But let’s look at what could happen to Bitcoin in the near future.
Bitcoin of the future
On March 12, a day that many investors today call “Black Thursday,” Bitcoin saw unprecedented price movements. This event will likely leave a lasting impression on Bitcoin investors’ memories for the future.
After falling from its mid-February high of $ 10,500, BTC had found some stability in the region of $ 8,000. This was the precedent for mass sales, which led to the decline we all know.
This event is said to have been a demonstration of surrender on the market. This is a time of exaggerated price declines at the end of a bear market. It is the point of maximum pain for anyone who has bought at much higher prices.
If we then analyze the data provided by Skew, we will find that Bitcoin fell below $ 4,000 and recovered to over $ 5,000 the next day. This is a complicated trend for Bitcoin in the future. This resulted in BitMEX billing totaling more than $ 1.6 billion.
Furthermore, this seems to have led to an exodus of market investors. In particular, Bitcoin’s open interest in BitMEX decreased by 40% after the move, according to skew research.
What does this mean for Bitcoin in the near future?
Historically, the capitulation precedes the creation of long-term funds. This notion is supported by the BTC rally from these lows to $ 7,000 in mid-March, an increase of almost 100%.
Given recent skew data, open interest in BitMEX continues to stagnate. This suggests that traders who have been negatively affected by this volatility are still not sure what to expect.
However, retail investors seem to continue to have confidence in the Bitcoin market in the future as TokenAnalyst data shows that exchanges have had no abnormal BTC outflows in the past 30 days. This is a sign that investors are not running away from the market.
This shows something very optimistic about Bitcoin for the future. If Bitcoin continues to push up as buyers try to make up for their recent losses, this will further reinforce the idea that $ 3,800 is a long-term fund.
Furthermore, we could say that this surrender has thrown the traders over the leverage, who now have to re-enter the market to catch the next uptrend.