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Why Bitcoin Is Unlikely To Ever Experience Another March-Like 50% Price Drop

Bitcoin 2020/11/19 14:57 by Brenda Ngari
Why Bitcoin Is Unlikely To Ever Experience Another March-Like 50% Price Drop

This year has undeniably turned out to be bitcoin’s year. Despite the coronavirus pandemonium, no asset class has served as a better hedge against inflation, an ideal safe haven than bitcoin. Moreover, the flagship cryptocurrency is the top-performing asset in terms of returns after bouncing back from the March coronavirus-induced crash. 

One analyst is noting that bitcoin is unlikely to incur another devastating downturn like the one seen in March where the cryptocurrency pulled back approximately 50% on a single day. This is because the Exchange Whale Ratio has stayed noticeably low during bitcoin’s parabolic advancement which means that large investors are not interested in taking profit on their BTC stashes.

With whales not selling their holdings, the bullish momentum may be strong enough to push the bitcoin prices higher.

There Won’t Be Mass-Dumping Like March This Year Going Forward: CryptoQuant CEO

Ki Young Ju, the CEO of crypto data market aggregator CryptoQuant, observed that bitcoin is not likely to ever see another mass-dumping event. He explained that BTC’s Exchange Whale Ratio is currently very low which is incredibly bullish.

There is less selling pressure to bitcoin when there is only a handful of whales depositing into exchanges. 

The Current Bull Market Is Vastly Different From The 2017 One

Based on bitcoin’s addresses with a balance of over $10, open interest rates on CME futures, bitcoin options open interest, the cryptocurrency’s spot prices in different national currencies like the Turkish Lira and the BTC held by Grayscale, bitcoin is breaking records.

All these metrics go to show how much the current rally differs from the historic rally of 2017. This is the opinion of CoinMetrics co-founder Nic Carter who recently published a detailed Medium post.

He stated:

“To sum up, today’s market is far more mature, more financialized, more surveilled, more orderly, more restrained, less reflexive, more capital-efficient, and more liquid than the market that powered the prior bull run in 2017.”

Carter also posted several charts that show “clear improvements” when today’s market environment is compared to the 2017 bull market.

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