To date, the crypto market remains on edge and is two months removed from Bitcoin’s all-time high near $65,000. A market analysis from Delphi Digital identified a “major head and shoulders pattern” that could “spell more short term pain if BTC dives below $30,000.”
With that in mind, now is a good time to review some key data points to gain a greater perspective on where Bitcoin price could go next.
Short-term holders suffer losses
A 50% decrease in price over the past two months may seem extreme to those unfamiliar with the volatility of the cryptocurrency market, but it comes as no surprise to the long-term hodlers who have seen multiple drawdowns of an even larger magnitude over the last decade.
As seen in the chart above, a drawdown of 70% or greater is not uncommon for BTC, especially following a significant run-up in price, hinting that the possibility for further pain is still a threat as bulls battle bears in the mid $30,000 range.
The rapidly falling prices sent new and old Bitcoin holders running for the sidelines, resulting in traders selling at a loss according to SOPR (Spent Output Profit Ratio) data highlighted by cryptocurrency analyst filbfilb.
In the past couple of days signs of a SOPR reset have appeared, indicating that average wallets are now selling at a profit again.
The Crypto Fear and Greed Index (CFGI) has also reached its lowest level since the March 2020 sell-off initiated by the Covid-19 pandemic.
