Historically, Bitcoin’s price experiences a rally that leads to the formation of local tops whenever demand from wallet addresses keeping their coins, particularly long-term holders or price-insensitive owners, increases sharply. These holders seem to absorb circulating supply, create a supply squeeze in the market, and start a brief rally. It is worth noting that once their demand subsides, prices typically decline.
Moving on, the second scenario is a final leg down, where prices wash out market appetite leftovers prior to the formation of a more durable trend. MorenoDV noted that the price has much more downside ahead, and this accumulation might be capturing falling knives.
This divergence rarely lasts long, but it usually resolves with force once it does. After the examination, MorenoDV declares that this is one of those situations where staying data-driven typically matters most, and not sentiment-driven.
