Bitcoin Price Plunge: Deepest Correction Since 2022 Triggers Losses for Short-Term Traders

Bitcoin's Deepest Correction Since 2022 Hits Short-Term Holders Hard

On-chain data from Glassnode reveals that the recent Bitcoin (BTC) price correction, the deepest in 24 months, has left short-term holders (STHs) reeling with unrealized losses. The price dropped over 16.5% from its peak on July 1st, marking a significant downturn. While the correction is shallower than previous cycles, it still placed immense pressure on the market.

83% of the Bitcoin supply held by STHs, defined as addresses holding BTC for less than 155 days, have fallen into the red. This translates to approximately $166.75 billion worth of Bitcoin, pushing them below their cost basis.

The Long-Term Outlook for Bitcoin

Analysts at Glassnode warn that the long-term outlook for Bitcoin remains bearish as long as the price stays below $58,000. This level serves as a significant resistance zone, with the 200-day Exponential Moving Average (EMA) at $58,180 posing an immediate hurdle for the bulls. Another key resistance point emerges from the $63,880 level, where the 50-day and 100-day EMAs converge.

A Glimpse of Hope

Popular analyst Daan Crypto Trades believes that reclaiming the 200-day EMA and maintaining a price above $59,000 would signal a positive start for Bitcoin bulls. This viewpoint is supported by liquidation data from Coinglass, which shows high short bids accumulating near the 200-day EMA, highlighting its importance.

It's crucial to remember that investing in cryptocurrencies carries inherent risks. Conduct thorough research and understand the market dynamics before making any investment decisions.