{"id":1049,"date":"2021-06-23T09:12:25","date_gmt":"2021-06-23T08:12:25","guid":{"rendered":"https:\/\/tradersofcrypto.com\/news\/?p=1049"},"modified":"2021-06-23T09:12:26","modified_gmt":"2021-06-23T08:12:26","slug":"btc-regains-5k-recovery-still-shaky","status":"publish","type":"post","link":"https:\/\/tradersofcrypto.com\/news\/btc-regains-5k-recovery-still-shaky\/","title":{"rendered":"BTC Regains $5K, Recovery Still Shaky"},"content":{"rendered":"##\n

The Bitcoin slide<\/a> brought prices down just below $29,000, causing extreme market fear. The worst-case scenario saw a dip to $25,000, possibly with continued price weakness.\u00a0In that scenario, the advice to “buy the dip<\/a>” is still highly risky for new retail investors.<\/p>\n\n\n\n

In the short term, BTC managed to recover just as fast, adding more than $5,000 in less than 24 hours. BTC rose to the $34,000 range, on trading volumes nearing the monthly high and reaching above $64B in the past 24 hours.\u00a0<\/p>\n\n\n\n

Altcoins followed, bouncing off their bottom, with most assets adding more than 10% to their price. But most traders moved back to BTC, expecting a continued recovery. The recent activity brought BTC market cap dominance to 46.8%, while altcoins continued to lag. <\/p>\n\n\n\n

In sympathy, ETH recovered<\/a> to $2,082, after falling to the $1,800 range.\u00a0<\/p>\n\n\n\n

What Caused the Volatility<\/strong><\/h3>\n\n\n\n

The chief driver of the fear was the uncertainty surrounding Bitcoin mining in China. A series of farm shutdowns were immediately reflected in the network hashrate, which fell to near two-year lows. BTC mining keeps slowing down, so far with little effect on the network. <\/p>\n\n\n\n

Now, it remains to be seen if the period of fear was an anomaly, and BTC prices could continue to rally in the longer term. <\/p>\n\n\n\n

More Dips May be Coming<\/strong><\/h3>\n\n\n\n

Some traders still expect a further crash to $25,000 or even $21,000, levels not seen since the fall of 2020. The trends of long-term accumulation have not been broken, and some buyers may continue to buy at that rate.\u00a0<\/p>\n\n\n\n

For BTC holders, the stock-to-flow model (S2F) remains one of the leading long-term predictions. The current short-term capitulation to $28,000 levels is a slight deviation from the model. <\/p>\n\n\n\n

The biggest fear is that the loss of 50% from peak values would lead to another \u201ccrypto winter\u201d similar to the three-year bear market and stagnation since 2018. During that period, it took years for BTC to return to an all-time high, and then the crash happened soon afterward. <\/p>\n\n\n\n

Short-Term Speculators Leave the Market<\/strong><\/h3>\n\n\n\n

While there are signs of a capitulation similar to the 2017 peak, there are also indications of a new range of investors in BTC. <\/p>\n\n\n\n

Glassnode data keep proving the model of large-scale owners riding out volatility for the longer term, while recent selling pressure may be coming from short-term buyers. <\/p>\n\n\n\n

While it is still possible to make bets against BTC in derivative markets, data is showing that actual BTC for sale<\/a> is much more scarce. Glassnode reveals a general stagnation of OTC sales, with large-scale owners preferring to hold onto their coins.\u00a0<\/p>\n\n\n\n

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#Bitcoin<\/a> miners have increased their distribution throughout June, as the mining industry experiences the largest migration in history.

Nevertheless, $BTC<\/a> holdings on OTC desks has reached a new local low, last seen in March 2020.

Read our analysis herehttps:\/\/t.co\/dRbQgKkwfh<\/a> pic.twitter.com\/9MDXQfVB4l<\/a><\/p>— glassnode (@glassnode) June 23, 2021<\/a><\/blockquote>