Bitcoin Shakeout: A Market Cleansing?

Bitcoin Market Shakeout

The Bitcoin market is experiencing turbulence, with prices declining and short-term profits dwindling. A significant increase in loss-selling — a 29% surge since June 10th — is raising concerns. However, this is occurring alongside a rise in conviction buying, creating a complex market dynamic.

Loss-Selling vs. Conviction Buying

• The number of Bitcoin holders selling at a loss jumped nearly 29%, from 74,000 to over 95,000.
• Simultaneously, a rise in conviction buying is observed, indicating some investors are accumulating during the downturn.

This divergence suggests a market shakeout, where weaker hands are exiting, leaving the field to more resilient investors.

A Tale of Two Holder Types

Historically, both short-term holders (STHs) and long-term holders (LTHs) benefited from Bitcoin's price increases. However, the current situation reveals a sharp contrast:

• LTH profit supply: 75%
• STH profit supply: a mere 12%

This divergence underscores the current market stress on short-term investors. The increase in loss-selling indicates capitulation amongst some, but the concurrent increase in conviction buyers suggests a belief in Bitcoin's long-term potential.

Is This a Market Bottom?

The current market behavior might be interpreted as a necessary cleansing phase before a potential accumulation period. While short-term pain is evident, this shakeout could lead to a more robust and sustainable market.

For those with a long-term perspective, this period could present an opportunity to accumulate Bitcoin at a lower cost basis. At Codeum, we understand the complexities of the crypto market. Our services, including smart contract audits, KYC verification, and custom smart contract development, help build trust and security in the blockchain ecosystem. We partner with launchpads and crypto agencies to ensure projects are secure and compliant.

Codeum: Your Partner in Blockchain Security

Navigating the volatility of the cryptocurrency market requires expertise and a robust security framework. Codeum provides essential services to ensure the safety and success of blockchain projects. Our offerings include:

• Smart contract audits
• KYC verification
• Custom smart contract and DApp development
• Tokenomics and security consultation
• Partnerships with launchpads and crypto agencies

Contact Codeum today to learn how we can help you navigate the complexities of the crypto world and build a secure and thriving blockchain project.