Last week, the price of Bitcoin fell by 9.8%, marking its biggest weekly decline since mid-March.
The currency fell to a two-week low of US$8,630 early on Monday. The latest price was US$8,730, down more than 11% from the previous trading day. High point after halving The price on May 18 was $9,960.
The recent price drop has in turn led to an increase in the number of addresses holding small amounts of Bitcoin.
The number of unique addresses holding at least 0.01 BTC (approximately $87 at the current price) reached a new high of 8.47 million on Sunday. According to the blockchain intelligence company Glassnode.
At the same time, last Friday, the number of addresses holding at least 0.1 BTC (approximately US$870) rose to the highest in a lifetime, with more than 3 million households.
Some people believe that the increase in demand during the price decline may be related to the idea that Bitcoin can reproduce history by mapping the price rebound in the next 12 months.
After the second halving on July 9, 2016, the cryptocurrency experienced a 30% fall in four weeks. However, in the following months, this decline was offset, and prices rebounded to record highs in March 2016.
“Prices are expected to fall, and the long-term bias remains bullish,” Darius Sit, co-founder and managing director of QCP Capital said. “we If the price falls to the $6,000-$8,000 range, it will be accumulated. “
Of course, the number of small addresses does not necessarily represent new individual investors, because one person can hold cryptocurrency in more than one address. Most importantly, exchanges and custodial services also hold Bitcoin in multiple addresses.
The wallet management system of virtual asset service providers has become more complex and sophisticated. Their wallet cluster includes more small wallets for security,” Ju said.
Even if the participation of small investors is increasing, it is unlikely to have a significant impact on the price of Bitcoin because the market is still dominated by large players, often referred to as “whales.”
On the other hand, in the past two weeks, the number of addresses holding at least 10,000 BTC and 1,000 BTC has decreased. According to Glassnode.
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In addition, options market activity indicates that the possibility of price declines in the near term may be greater.
“Traders are buying out-of-the-money put options,” Chris Thomas, head of digital assets at Swissquote Bank said.
A put option is a put bet on a cryptocurrency, a call option represents a call bet, and the exercise price of a cash put option is lower than the market price of the underlying asset.
Thomas said that he expects Bitcoin to fluctuate towards the US$8,000 to US$8,200 range in the short term, which seems very likely because the cryptocurrency has broken the upward trend line from the March low.
On Monday, Bitcoin fell by 5%, running counter to the support of the 2.5-month-long bullish trend line.
“However, the relative strength index is neutral,” Yuriy Mazur, head of data analysis at cryptocurrency exchange CEX.IO, Tell CoinDesk. “It is not yet clear where the BTC is going. It may retreat to $6,500 or reach $10,000. We may clearly indicate further development directions in the last few days.”
If the Bitcoin price rises above the Sunday high of $9,310 amid strong trading volume, the immediate bearish situation will weaken. However, to resume the bullish trend, a convincing price breakthrough of $10,000 may be required.
Featured photo: DepositPhotos©ulchik74
