Why Crypto Dump?

 _{Authors: Trav and TheOpenChain}

The pain is real!

After so much hype and green days, it absolutely sucks to see our ports get hit so hard. Bitcoin tanked, and alt’s dipped even harder.

So today let’s answer these important questions:

• What happened?

• What’s going on with the technicals?

• How long will this dump last?

Let’s dive in.

First, let’s zoom way out.

There have been some major economic and political factors that have affected crypto.

In a nutshell:

• fears of impending conflict in the Middle East caused market panic.

• the S&P 500 took a massive hit.

• people are shifting liquidity to hedge risk (Gold, Oil, etc.)

• tax season. People take their money out of crypto to not have to pay capital gains.

Read this for more details.

On-Chain Clues.

Let’s look at several things here:

• Whale activity

• Funding rates

• How much loss ports are actually in

• Social sentiment and what it tells us

First… The Whales.

The most influential holders tell us a few things:

• They didn’t cause this dip

• The Mega Whales have been accumulating since this downtrend started, with a small (not majorly significant) dip since the downturn.

• The Sharks (100-1000 BTC wallets) have woken up and started to accumulate more.

These are all encouraging signs.

How about the rest of the market though?

Simple answer. Everyone else is buying.

So if everyone is buying, why did we crash so hard?

Likely due to the sheer drop in active wallet addresses that we can see. This indicates fear and uncertainty, and I would love to see these metrics start to climb again before seeing new highs.

So what do the Funding Rates tell us?

Funding rates tell us where traders are positioned who take positions in derivates and perpetuals.

Traders are looking neutral/bearish at the moment, which, IMO, is exactly what we need to see before price starts to rip again.

I would expect the rates to go more in the red before seeing a pivot in price back to the upside, but we are on the right track.

How are holders ports looking?

30 day and 365 day Bitcoin holders took a very clear hit. Especially the 30 day holders who are now at a loss.

Why is this a good thing?

Because historically, these low levels precede market upturns.

How are people feeling about Bitcoin?

Neutral. Not as fearful as I would have thought.

Expecting sentiment to dip further before price starts challenging new highs once again.

What does the Chart tell us?

• Once again, price did a fake out break to the upside, before plummeting to the downside out of this wedge.

• Huge buying pressure is coming in to scoop up this dip, and price has yet to make a lower low.

• With such a strong move down, I do expect to see further downside prior to new highs.

• The orange, blue and green levels are the next strongest supports.

All in all, my sentiment remains long term bullish.

I personally am not taking any short positions, instead I am continuing to dollar cost average into Bitcoin and my favorite alts (Solana, Injective, Avax, etc.)

Of course, none of this is financial advice, but let’s hang in there team.

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