Bitcoin Crashed Below $55,000 But Traders Are Not Fearful, Why?

Dalmas Ngetich

11 months ago

3 mins read

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As Bitcoin faces strong headwinds, breaching two critical support levels at $60,000 and $56,500 in quick succession, it may, on the surface, appear that fear is gripping the market. There are reasons to be afraid, especially for coin holders leveraging BTC in decentralized finance (DeFi) protocols, looking to take out loans using the asset as their collateral.

Fear Is Yet To Grip The Bitcoin Market

Even as prices plunge, one on-chain analyst, taking to X, argues that the market is relatively composed and fear and panic haven’t fully gripped it yet. Pointing to the Bitcoin Daily Realized Profit Loss ratio, the analyst said that unless there is an uptick in the number of addresses in red, pointing to panic selling, the market can withstand more losses.

BTC traders are not fearful | Source: @AxelAdlerJr via X

Per the analyst’s assessment, the absence of “panic selling” bars suggests that investors are still processing the current events. Even as prices crater below $56,500, the market, the analyst added, can fall to as low as $47,000, a level that “doesn’t look as terrible as it did three weeks ago when we were at 70,000.”

Nonetheless, amid this necessary correction, the analyst added that the shakeout should be slower. In this way, there will be a more orderly market correction.

As of July 5, Bitcoin fell nearly 30% from all-time highs and is under immense selling pressure. Following the drop below $56,500 earlier today, it is evident that the coin is now within a bear breakout formation. The sell-off forced prices from the March to May 2024 range. This signals a new phase after expansions in Q1 2024 when the coin roared to $73,800.

Bitcoin price trending downward on the daily chart | Source: BTCUSDT on Binance, TradingView

Analysts expect more losses with sellers in the driving seat and Bitcoin within a bear breakout formation. Thus far, the immediate support is at $50,000 and $45,000, marking January 2024 highs.

Best Time To Buy Bitcoin? Wait For This Signal

While the drop is forcing investors to seek refuge in stablecoins, another analyst thinks this could be the best time to scoop more BTC at a discount. Taking to X, the analyst pointed out several fundamental factors that paint a long-term bullish picture.

Some of these tailwinds include the availability of spot Bitcoin exchange-traded funds (ETFs). There’s also regulatory clarity in the United States ahead of the highly contested presidential election. At the same time, the analyst is convinced the upcoming $16 billion payout by FTX trustees would be a net positive for optimistic BTC bulls.

Fewer BTC addresses being created | Source: @AxelAdlerJr via X

Even so, before there is stability and this week’s sell-off countered, there must be an uptick in new addresses. Once this is observed, it would mean that new investors are pouring in, creating demand for the coin. For now, prices are plunging, and fewer addresses are being created.

Feature image from DALLE, chart from TradingView

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

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