Deciphering the reasons behind Bitcoin’s [BTC] recent price correction

ambcrypto.com:

Bitcoin [BTC] fell victim to a price correction over the last 24 hours as its price declined by more than 1% on the charts. At press time, it was still trading above the $28,000-level with a market capitalization of over $542 billion.

A  CryptoQuant analysis from 5 April outlined the reason behind this decline in a recent blog post. 

Read Bitcoin’s [BTC] Price Prediction 2023-24

Crazzyblockk, an author and analyst at CryptoQuant, mentioned in hisanalysis that a reliable way to analyze BTC’s price action is with the profits earned by short-term holders.

According to the analysis, the value in short-term holders’ pockets typically increases near the price bottom. And, the need for Bitcoin’s sustained price growth depends on how these players act and how profitable they are. Therefore, a look at the behavior of short position traders can help gauge the reason behind BTC’s latest price decline. 

CryptoQuant’s data revealed that selling pressure was dominant across the derivatives market, which was evident from BTC’s taker buy/sell ratio. More than 15 million long positions were liquidated in the last 24 hours, indicating higher selling pressure.

The increased liquidations in the market could have also played a part in pushing Bitcoin’s price down in the last 24 hours. Additionally, the trend reversal was also supported by decreasing Open Interest, which was bearish for the king of cryptos. 

Source: CryptoQuant

Though the ongoing market looks troubling for BTC , things might turn in favor of the crypto soon. BTC’s exchange reserves, for instance, have decreased – A sign of low selling pressure. The total number of active wallets used to send and receive coins has also increased, which is by and large a positive signal.