Bitcoin (BTC) extended its slide, going under $67,000. Sentiment is starting to shift, as some groups turn bearish. The metric of smart money shows that BTC’s next move may be bearish.
BTC prices sank deeper, trading at $66,694.20. Trading volumes increased from baseline to above $26B in 24 hours. The correction arrives at a moment when there are conflicting sentiments for the coin’s next move. The Bitcoin fear and greed index increased to 74 points, suggesting buying behavior.
Read: Bitcoin ETF returns to outflows: Buying the dip is still working as BTC bounces from lows
A more detailed metric views the behavior of smart money investors. During the latest downward market move, smart money investors were more bearish on BTC compared to the general pool of traders.
However, long-term demand for BTC remains strong even during the recent fluctuations. As the price trends downward, this is also seen as an accumulation zone for those who want to acquire and hold actual coins. Some recent predictions see BTC sliding as low as the $63,000 range and extending the accumulation period by another three months.
Even with bearish attitudes, BTC spot markets see continued demand for long-term holdings. However, unlike retail investors, institutional investors may have some leeway to take profits and trade.
Smart money metrics are based on known wallets that have outperformed in the past. The metric for BTC is more reliable. For smaller coins or NFT, smart money wallets often boost buying to shift the sentiment.
The biggest threat for BTC is a series of support breakdowns, which may cause a deeper correction. Current key support levels at $60,000 and $65,000 are the main downside risk for BTC.
At the same time, crypto natives see the current events as the usual path to a bigger post-halving rally. BTC is still expected to break to new all-time highs, and a correction would be seen as a bear trap.
BTC crowd votes with their money
Even with more volatile trading, retail and crowd buying are not giving up on BTC. A buy-and-hold attitude may not predict BTC’s moves in the short term. The data gathered by the analysts at Santiment shows that “buying the dip” is still the common strategy when BTC moves downward.
The current price dip is also seen as market manipulation to extend accumulation and acquire more coins at a lower rate before a bigger rally. Retail wallets are growing faster, and new wallets are being created to extend the long-term holding trend.
A curious shift is also happening between large-scale and retail-sized wallets at the current price level. The trend of retail versus institutional wallets is shifting, signaling bearishness from large-scale holders.
Also read: Bitcoin Price Prediction 2024-2030: Will BTC Price Surpass $100K Post-Halving?
The ratio of retail to institutional buyers rose in the past few days. This metric is a proxy indicator for price action. An inflow of institutional buying usually precedes a price rally, while retail dominance may indicate a lower market price.
Data and sentiment trackers also warn that the crowd approach to BTC may predict an overly optimistic scenario. The current tenacity of retail buying may not prevent another price slide.
The current retail buying, however, may limit the slide of BTC. One of the reasons is the lower level of exchange reserves. Buying and withdrawals managed to absorb even increased selling from miners. At the current price level of under $67,000, the call for “buy the dip” is accelerating on social media.
Retail is also not seen as a factor that can sway the BTC price in either direction. The current consensus of small-scale holders is that price fluctuations are signs of manipulation, and may be short-lasting.
In 2024, the liquid and highly liquid BTC supply are slowly diminishing. At the same time, the illiquid supply is expanding and has not diverged from its long-term trend. Actual BTC coins now have additional mechanisms to build liquidity and are seen as simply too valuable to be used as speculation.
Cryptopolitan reporting by Hristina Vasileva
