Bitcoin’s recent drop was unexpected, but the situation might improve thanks to the fact that institutions are not aggressively selling off their holdings. This provides a silver lining for those who believe the asset is rapidly declining.
Even before the U.S. government began selling its Bitcoin, spot traders had been offloading their holdings. This influx of Bitcoin into the market typically triggers a sell-off as traders anticipate an increase in supply.
As seen in the BTCUSD chart by TradingView, the market’s initial response has been sustained selling pressure. The reaction to the news was relatively calm, with some traders opening short positions in anticipation of the increased supply. However, the main activity has been the closing out of long positions.
This indicates that while there is some bearish sentiment, many traders are not actively shorting the market; they are simply stepping back. Notably, institutions are not aggressively selling their Bitcoin despite the existing pressure.
This cautious approach by major holders might benefit the market by allowing it to stabilize earlier than anticipated. If institutional sales do not overwhelm the market, it could prevent a more severe drop.
The market’s ability to maintain key support levels will be crucial. The actions of the U.S. government and other significant holders will heavily influence Bitcoin’s price movements in the near future.
Overall, there is potential for a reversal, but it will require significant inflows, which have not yet materialized.
