- Bitcoin dropped to lows of $30,000 on Coinbase, dipping as low as $28,500 on some derivatives exchanges like BitMEX.
- Many lowe-cap coins crashed around 50% from daily opening due to large-scale liquidations.
- On-chain analysis suggests that long-term investors are bullish despite the crash.
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Bitcoin’s 30% plunge yesterday echoed with the beginning of the 2018 bear market. Still, on-chain data indicates that long-term holders have strong hands.
Maximum Pain in Bitcoin Prices
Bitcoin dipped 30% yesterday as $800 billion in valuation was wiped out across the broader crypto market. According to TradingView, the total market capitalization of cryptocurrencies fell to lows of $1.2 trillion from an all-time high last week.
In the past, such downtrends have been seen only four times since Bitcoin’s top in 2017, with three of the four occasions leading to a prolonged bear market.
The first was on Dec. 24 when Bitcoin dropped drastically after touching a top of $19,600 five days earlier.
The asset dipped two months later then hit lows of $4,000 in Nov. 2018. On both occasions, the move kickstarted a bear trend.
Many other compelling arguments find relevance with the 2017 top. For instance, Bitcoin’s dominance over the cryptocurrency market is 44%, which is a similar level to when it topped out in late 2017.
Furthermore, the euphoria caused by the Coinbase direct listing seems co-incidental with CBoE futures debut in December 2017. In retrospect, the surge of so-called “dog tokens” like Shiba Inu was another palpable top sign. Nevertheless, following the “diamond hands” narrative in crypto, on-chain data suggests that old investors are still holding onto Bitcoin.
On-chain Analysis Highlights Faith in BTC
Before the top in Dec. 2017, the coin days destroyed (CDD) metric saw a significant spike in activity. The CDD metric tracks the time when Bitcoin was last moved in an address multiplied…