- Bitcoin has dropped dramatically from its $19,500 highs
- The coin fell as low as $16,200 earlier today amid a strong sell-off and a lack of buying support
- Some think that the $3,000 drop could be the start of a deeper retracement in the months ahead
- Willy Woo, a prominent on-chain analyst, remains optimistic.
Bitcoin Drops Dramatically From $19,500 Highs to $16,200 Lows
Bitcoin has dropped dramatically from its $19,500 highs. The coin fell as low as $16,200 earlier today amid a strong sell-off and a lack of buying support. Some believe this is a result of most U.S. traders and institutions taking the past few days (and next few days) off as a result of the Thanksgiving season.
Some think that the $3,000 drop could be the start of a deeper retracement in the months ahead. Though, according to Willy Woo, the long-term fundamentals of this space remain more bullish than ever, making this a good time to buy.
Referencing the chart below from Glassnode, which shows that Bitcoin’s exchange flows are neutral, Woo wrote:
“Margin longs will be spanked until they go short. Was bullishness was way overheated. Exchange flows are neutral; spot sellers are matched with buyers. Fundamentals a great. The next few weeks? A great time to scoop cheap coins for 2021.”
He added that the recent rally from the $17,000 region to $19,000 was marked by “smaller buyers.” To him, this is a clear sign that the market was starting to become overheated in the short-term as small buyers are often indicative of retail players:
“The last phase of the run to ATH resistance was marked by smaller buyers, a class inrush of noob FOMO. That said, the rate of those new users coming last week was the highest we’ve seen in this bull cycle, right up there with 2017 mania levels.”
Chart of BTC's price action over the past few months with an analysis of on-chain trends from Willy Woo (@Woonomic on Twitter). Source: BTCUSD from TradingView.com
Not the Only Bull
Other analysts remain bullish despite the ongoing drop.
Referencing how a vast amount of Bitcoin is being bought by retail players using platforms such as PayPal, Dan Morehead, co-CIO of Pantera Capital, recently said:
“When PayPal went live, volume started exploding. The increase in itBit volume implies that within four weeks of going live, PayPal is already buying almost 70% of the new supply of bitcoins. PayPal and Cash App are already buying more than 100% of all newly-issued bitcoins.”
Many think that eventually, buyers will strongly outweigh sellers on any given day. This will result in a strong surge higher over time as there isn’t enough market supply of BTC to meet market demand.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Bitcoin Fundamentals Remain Great Despite $3,000 Drop From Highs