Cryptocurrency company Galaxy released a research paper this week analyzing the decline in the value of cryptocurrencies on Tuesday, March 5, and its implications for the current market uptrend.
In a document from the company’s research department, it is stated that the remains “unsuitable for inexperienced investors” after the leading digital currency saw a decline in value after hitting a new record high earlier in the week.
“The reduction in value was exacerbated by a considerable number of liquidations of long positions – $400 million in the 2 p.m. to 3 p.m. Eastern time period alone,” the researchers observed. “The last 24 hours (as of 7 a.m. Eastern Wednesday) have seen over $800 million in long position liquidations (and over $1 billion in total if includes liquidations of short positions) on various cryptocurrency futures trading platforms.”
Despite the decline, with bitcoin hitting new record highs, Galaxy said price fluctuations have returned and are expected to persist “as we confront and overcome investor concerns.”
“Several of the oldest cryptocurrencies saw a resurgence in the previous day [5 mars] and were likely sold, which may have contributed to the spike in value that day,” the researchers mentioned. “Blockchain data indicates that a substantial amount of coins created in 2010 became active again yesterday and were transferred on the blockchain – it is assumed that they have been sold. Each investor has their own profit-taking threshold, and if this activity was conducted by a single person and they actually sold, they probably regretted not selling in 2021 when prices were similar and chose to secure its profits now that prices have risen again.”
However, when analyzing the “coin days destroyed” indicator, the company observed that the activation of old coins typically signals either the high points of uptrends or the lowest points of market conditions desperate.
Nonetheless, “rest assured that we will overcome investor concerns as this market uptrend progresses,” the researchers said, expressing their belief that bitcoin’s rise “is only now his beginnings”.
“Maintain your resolve, move your coins to personal storage if possible, and participate in what is arguably the most remarkable phenomenon the financial markets have ever witnessed,” they advised in conclusion.
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