Bitcoin Wallets Plunge Rapidly, Half A Million Liquidated

The leading cryptocurrency, Bitcoin, has been under severe selling pressure, falling below $40,000 earlier this week. This has triggered a massive liquidation of small Bitcoin wallets.

According to Santiment, an on-chain data provider, the total number of Bitcoin wallets has dropped significantly, reaching the fastest rate since early Oct – right before the start of the major crypto bull run. This shows a similar level of frustration among investors. In just four days, more than 487,000 wallets, each holding 1 BTC or less, have been wiped out.

Such sharp drops in wallet numbers historically indicate capitulation, a stage that market price recovery could follow. This trend usually lasts until smaller traders regain confidence in crypto as a worthwhile investment option.

Bitcoin Price Outlook: ETFs, Liquidations, & Corrections

Investors view the recent lackluster market performance, following the approval of 11 ETFs in the past two weeks, as a major factor driving the liquidation of wallets. Santiment suggests that these events may hint at a possible change in sentiment among smaller traders, with the market ready for potential corrections.

Investors have closely followed the Bitcoin price movements, wondering what will happen next. When writing, BTC is trading 0.73% higher for $40,104 with a market cap of $786 billion. However, analysts warn that there is a high chance of a further decline, with the BTC price likely to plummet another 15-20%.

In a recent evaluation, crypto analyst Ali Martinez issued a warning, stating that if Bitcoin’s price falls below $38,130, short-term BTC holders may incur losses. This drop in Bitcoin’s value could spark a new round of panic selling as holders try to reduce potential losses in the short term. Martinez’s analysis serves as a reminder to the crypto community, emphasizing the importance of monitoring Bitcoin’s price movements and being ready for possible market responses.

Related Reading | SEC Commissioner Hints At Smooth Approval For Ethereum ETFs

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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