Will BTC front a solid price recovery after US Thanksgiving?
- BTC slumped about 9% to $90K amid $4B panic selling by short-term holders.
- Analysts projected a likely recovery after US Thanksgiving, citing historical trends.
Bitcoin [BTC] shed 9% in the past few days, dropping from an all-time high (ATH) of $99.5K to $90.7K, on what analysts linked to STH (short-term holders) panic sell-off and the US Thanksgiving holiday.
As of press time, the king coin stabilized above $93K, easing the bloodbath witnessed in the past 24 hours. But what accelerated the flash crash on Tuesday, the 26th of November?
Source: CoinMarketCap
Why Bitcoin dumped
A significant part of the dump happened on 25th-26th November, on which market analysts collectively pinned on panic selling from STH (short-term holders).
Crypto analyst James Van Straten noted that short-term holders dumped nearly $4 billion BTC, which eclipsed August’s carry trade unwind.
Another possible factor at play was the US Thanksgiving holiday. According to Galaxy Digital’s head of research, Alex Thorn.
Drawing insights from the 2020 Thanksgiving BTC dump, Thorn said,
“Who remembers the Thanksgiving dump of 2020? Bitcoin dumped 17% between Wednesday, Nov 25, and Friday, Nov 27, 2020. BTCUSDT later went on to more than 3x over the next 5 months. Does history rhyme?’
Thorn added that the Thanksgiving local bottom for BTC could be in after the recent 9% dip, based on historical trends.
Straten echoed the same and emphasized that BTC followed the STH realized price after past dumps. He stated,
“Very similar setup to Q4 2020, with a massive flush out during Thanksgiving 2020. Shortly after, $BTC went vertical from $10k to $60k, with many pullbacks along the way using STH Realized Price as support.”
Source: Glassnode
Does that mean $90.7K was the local bottom for this US Thanksgiving? Well, not all were outrightly optimistic about that.
According to BTC trader Cryp Nuevo, the downtrend could extend to the $85K-$88K region before reversing.
Source: X
Whether BTC will slide below $90K remains to be seen; however, the market consensus was inclined towards a likely recovery after the US Thanksgiving.