Key Reason Behind Bitcoin (BTC) Drop Revealed

Bitcoin’s drop was really unexpected, but things may turn out better than expected thanks to the fact that it is not being sold to the ground by institutions, and there is a silver lining that you should not miss if you believe that the asset is going down rapidly.

Even before the U.S. government started selling BTC, spot traders had been selling their holdings. As traders anticipate an increase in supply, this inflow of Bitcoin onto the market usually sets off a sell-off.

As expected under the circumstances, the market’s initial response has been sustained selling pressure. The market’s reaction to this news was relatively calm. A few shorts have opened in anticipation of the supply arriving on the market shortly. On the other hand, closing out long positions has been the main activity.

This suggests that although there is some bearish sentiment, many traders are not actively shorting the market; instead, they are just backing off. The fact that institutions are not aggressively selling off Bitcoin is notable even in spite of the existing pressure.

This moderation on the part of major holders might have a benefit. The market may stabilize earlier than anticipated if institutional sales do not overwhelm it. Institutions are responding cautiously, and spot markets’ persistent sell pressure points to an uncertain period ahead.

But Bitcoin might be able to avert a more severe drop if it can hold onto important support levels. The U.S. government and other significant holders will have a significant influence on how the price of Bitcoin moves in the near future.

In general, the possibility of a reversal is present, but it still requires some serious inflows, which are not there yet.

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