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Why is Bitcoin going down? Analysts link $4B selloff to holder panic!

2min Read

Will BTC front a solid price recovery after US Thanksgiving?

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  • 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? 

Why is Bitcoin going down

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. 

Why is Bitcoin going down

Source: Glassnode

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.” 

Why is Bitcoin going down

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. 

Why is Bitcoi n going down

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. 

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Benjamin Njiri is a Crypto Analyst and Journalist at AMBCrypto who specializes in technical analysis and identifying emergent market trends. He excels at breaking down complex chart patterns and on-chain data to make them accessible and actionable for investors. His rigorous analytical approach is founded on his academic background as a Telecommunication Engineering graduate. This discipline has equipped him with an expert understanding of signal processing and data analysis, allowing him to systematically filter market noise from true trend signals with engineering precision. Armed with this unique perspective, Benjamin focuses on providing clear, data-driven insights into the digital asset landscape. His work is dedicated to demystifying the intricate world of cryptocurrencies, empowering readers to understand the forces that shape the market and to navigate it with greater confidence.
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