Bitcoin depreciation, why? (Is it okay not to sell Bitcoin when it depreciates?)

08/17/2023 20:40 • Daily Digest • 90 views

Bitcoin has depreciated, but why? Why did Bitcoin experience such a situation? It is because the market does not trust it and its price is underestimated.

According to the latest data from CoinMarketCap, as of November 17th, only four out of the top ten cryptocurrencies by market capitalization have fallen or are falling. Bitcoin has experienced significant price fluctuations in the past few trading days, with cryptocurrencies such as Ethereum, Litecoin, EOS, and XRP falling by more than 80% and 70% respectively. So what factors have caused such a large decline in Bitcoin? Let’s find out!

1. Bitcoin Halving Market

According to Coinmarketcap, the current network hash rate is 100.15EH/s; the total hash rate of the Bitcoin network is about 165.6TH/S; the mining difficulty is about T12.5W; the block time is about 13 seconds in 24 hours; the average block speed is about 5 minutes; there are nearly 300,000 active addresses; the block reward has decreased from 25 BTC to 6.25 BTC.

2. Bitcoin On-chain Fundamental Analysis

Chart source: Glassnode

Due to the good health and scalability of the Bitcoin network, there is increasing activity on the Bitcoin blockchain. With the addition and increase of new users, the demand for this digital asset will rise.

3. Grayscale Holdings

Since 2013, GBTC has been in a state of growth. In February 2014, when Bitcoin reached a high price of $20,000, GBTC quickly surged to around 20,500 coins. In the following years, GBTC continued to rise and grow. By the end of 2018, this trend had not changed. From the beginning of 2019 to the present, GBTC has been slowly climbing and showed a strong parabolic trend at the end of 2019. However, in the first half of this year, Bitcoin experienced a significant small bull market correction.

4. BitMEXResearch data shows:

Although the market sentiment in the second half of 2020 is still optimistic, investor sentiment is unusually sluggish, with institutional inflows significantly lower than the same period last year. In addition, since 2017, the outflow amount of GBTC has exceeded $20 billion. Most of the flow in 2017 came from retail investors, who could not get enough money for daily investment and savings, resulting in a large number of retail investors turning to Bitcoin futures contracts.

Selling Bitcoin when it depreciates, is it okay?

During the market crash, the price of Bitcoin has dropped to the range of $35,000. But here’s the thing: Do you really think you have money?

What does this mean? If you don’t sell, you’ll lose another half. This is a very embarrassing question: What is the fundamental reason for making investors lose money? Or, is it because they don’t have the ability to understand market volatility?

We all know that in the current position, there are many people “harvesting leeks” – when everyone thinks that the price will rise, they often make money, but in the end, the money disappears in the market. For example, in recent weeks, the price of Bitcoin has been hovering between $10,000 and $11,000. In fact, many times, “harvesting leeks” is to work for those who haven’t made money, and even the worst-case scenario (investment loss) ends up being cut wave after wave, ultimately swallowing all the losses…

So what should we do next? The answer is: You cannot keep holding your money unless you can never move. If you want to continue holding, you need to constantly increase your capital, don’t deposit all your money in the bank at once, and maintain enough confidence to deal with market changes.

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Bitcoin depreciation, why? (Is it okay not to sell Bitcoin when it depreciates?)

Selling Bitcoin when it depreciates, is it okay?

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