Bitcoin Stood Below $55,000 But Investors Didn't Panic. Here's Why

As Bitcoin faces strong headwinds and breaks two important support levels at $60,000 and $56,500 consecutively, fear may seem to grip the market. There may indeed be good cause for alarm; particularly among coin holders leveraging Bitcoin in decentralized finance (DeFi) protocols as collateral against loan applications.
Fear hasn’t Set In to Bitcoin Market Even as prices plunge, one on-chain analyst noted to X that fear and panic haven’t fully taken hold. Citing the Daily Realized Profit Loss ratio as evidence of such things happening; in their estimation panic selling does not yet threaten market stability unless more addresses turn red indicating more selling which indicates panic selling activity; otherwise the market can endure further losses without suffering irreparable damage.
According to one analyst’s assessment, BTC traders do not appear fearful; no “panic selling” bars appear, suggesting investors are still processing current events and have yet to react in fearful fashion as prices tumble below $56,500 and drop as far as $47,000; at that level “it doesn’t look nearly as terrible” than when prices hit 70,000 just three weeks prior.

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Yet even amid this necessary correction, an analyst stressed the need for gradual market adjustment. That way, correction will take place more gradually and safely.
As of July 5, Bitcoin had fallen nearly 30% since reaching all-time highs and is under intense selling pressure. Following its recent drop below $56,500 earlier today, it appears to have entered bear breakout formation – with selloff prices shifting between March to May 2024 range and this signalling an imminent new phase since Q1 2024 expansions reached $73,800 in one of those expansions.
Analysts anticipate further losses with sellers driving prices downward and Bitcoin potentially being in a bear breakout formation. So far, immediate support can be found at $50,000 and $45,000 which represent January 2024 highs respectively.
Wait For This Signal To Buy Bitcoin
While investors seek refuge in stablecoins amid Bitcoin’s recent decline, one analyst sees an opportunity in this momentous opportunity: an analyst at X has laid out various fundamental indicators which indicate long-term bullish sentiment and could signal when is the ideal time and opportunity to purchase cryptocurrency at discounted prices.
Related Reading: Dormant Bitcoin Wallet Holds $6.8 Million BTC Reactivated; Are They Selling?
Some of these tailwinds include the availability of spot Bitcoin exchange-traded funds (ETFs). There’s also regulatory clarity ahead of a highly contentious presidential election cycle in the US; and an analyst believes FTX trustees’ planned payout of $16 billion would provide further momentum for optimistic BTC bulls.
Before any stability can be established and this week’s selloff reversed, new addresses must increase significantly; once this occurs, this indicates new investors entering and increasing demand for BTC. Unfortunately prices continue to decrease while less BTC addresses are created each day.