The Bitcoin and crypto market is still wallowing in turmoil from the collapse of the FTX exchange. Many crypto assets have followed a correlation with the decline of FTX Token, FTT. As a result, the past few days brought an intense bearish pull on the prices of virtual assets.
With the recent events’ outplay, the crypto market’s overall performance shows doubts and fear. As a result, investors and other participants have initiated a panic sell-off for most crypto assets.
Hence, the cumulative market cap has been experiencing a free fall since last week. The overall market cap sits at $824.19 billion at the press time, showing a drop of 1.92% over the past day.
Also, the bearing trend triggered by the FTX crisis has brought the global primary cryptocurrency down. Bitcoin has maintained a low correlation in the crypto market, creating more tension for its long-term holders.
BTC Price Drop Creates Selling Pressure
From the recent reports, BTC long-term holders are facing intense selling pressure due to the declining market situation. The price of Bitcoin has been falling since last week with no restrictions.
At the time of writing, BTC is trading at $16,666 indicating an increase over the past 24 hours and its dominance over altcoins is 38.49%.
A report from Glassnode, an on-chain data provider, highlighted the MVRV ratio of Bitcoin’s long-term holders. The firm noted that BTC long-term holders are currently facing acute financial stress. They are holding an average of -33% in unrealized losses.
According to the firm, such a value is close to the lows of the 2018 bear market, where the peak unrealized loss was – 36% on average.
The data provider noted that the last time BTC long-term holders had a similar stress experience was at the token’s price reversal point. This means that Bitcoin’s bottom could be around the corner.
Bitcoin Selling Pressure Yet To Get Worst?
However, Peter Shiff, a BTC critic, thinks the worst Bitcoin selling pressure is yet to come. Sharing his older prediction from June 2022, Shiff stated that selling pressure on Bitcoin for bill payments would only worsen once the recession deepens.
Also, that could happen if several holders lose their jobs, primarily workers in blockchain firms that would become bankrupt. So unfavorable changes for such holders will lead to more Bitcoin sell-off.
Following the collapse of FTX, many Bitcoin investors have transferred their holdings from exchanges. They now refer to using self-custody for their holdings. This has created massive historic withdrawals from crypto exchanges.
According to the report from Glassnode, exchanges have witnessed one of the most significant cumulative drops in Bitcoin balance. The platforms recorded a decline of 72.9K in seven days.
The data provider mentioned that the situation is comparable to three historical periods with such a vast BTC movement. They were in April 2020, November 2020, and June-July 2022.
Featured image from Pixabay, chart from TradingView.com