Bitcoin Plunge: One Statistic Reveals Who’s Panicking and Who’s Not

bitcoin plunge


  • New investors who entered the market with Bitcoin spot ETFs are selling at a loss, while long-term holders remain unfazed.
  • Bitcoin's price, despite recent drops, has shown more stability compared to previous bull market cycles.
  • Analysts suggest Bitcoin's next critical support level could be around $47,000, potentially shaking out more short-term investors.


Bitcoin’s recent plunge exposes a divide: newcomers panic-sell while veterans hold steady. On-chain data reveals the contrasting behaviors of investor groups.




As Bitcoin’s price fell below the critical support level of $60,000, a wave of panic selling began in the market, with Bitcoin further dropping to $53,600 earlier today.


bitcoin plunge

(source: TradingView)


But who is selling during this wave of sell-offs? On-chain data provided by CryptoQuant shows that the majority of this selling has come from new investors who entered the market this year, who have been forced out during this “sideways summer,” incurring losses and fleeing the scene.


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According to CryptoQuant’s charts, since the launch of the Bitcoin spot ETF in January, there has been a rapid and substantial increase in new investors. However, these investors are not stable long-term holders.



Analyst Cauê Oliveira pointed out on Thursday that Bitcoin worth approximately $2.4 billion, held for only 3 to 6 months, was massively transferred and sold during the price drop, with this type of Bitcoin activity showing a significant spike in recent days.


Cauê Oliveira said that these entities that bought in because of the Bitcoin spot ETF could be classified as ‘long-term’ holders, but their actual behavior is more akin to that of short-term investors, as they only entered the market at the beginning of this year.


He believes that these investors likely bought in with the “purpose of speculation” at the same time as the Bitcoin spot ETF, but after the listing, while Bitcoin’s price did break new highs, it did not soar as expected. Instead, it declined back to levels around or even below the cost price, causing distress among short-term investors.


According to LookIntoBitcoin data, the realized price for short-term Bitcoin holders is currently $64,614, about 10% higher than the current market price.




In contrast, entities that have held for over a year show no significant signs of selling, according to Cauê Oliveira’s observations. This demonstrates that veterans, having been through numerous market fluctuations, still possess sufficient confidence when facing economic downturns.


Despite Bitcoin’s price having been trading sideways and even trending downward since March, its price has not fallen more than 20% from its historical high of $73,400. Oliveira notes, compared to past cyclical bull markets, this round of Bitcoin has shown remarkable stability.


However, considering the recent panic selling, another analyst from CryptoQuant, Axel Adler Jr., believes that Bitcoin’s next critical support might be much lower than its current price, possibly around $47,000.



Axel Adler Jr. pointed out that the $47,000 price is 25% lower than the average purchase price of short-term holders, which would make it a good support level and an important shakeout point for new buyers during the market adjustment: “The organic adjustments during the previous bull markets lasted between 110 and 160 days; whether the market will experience a similar adjustment again remains to be seen.”




Overall, the Bitcoin market is currently in a fragile phase, with newcomers panicking due to price fluctuations while experienced investors continue to maintain their composure. The future market trend will depend on more market parameters, but what is certain is that as the investor community matures, the stability of the Bitcoin market will gradually improve.




Current situation:

  • Price has already dropped to $54,000 range
  • Broke through previous support levels


Market dynamics:

  • Selling pressure has increased
  • Liquidity challenges for sellers


Next potential support:

  • Watch for stability around current levels
  • Possible further drop to $47,000 as suggested by analyst Axel Adler Jr.


Trader behavior:

  • Caution advised for new long positions
  • Experienced traders may look for oversold conditions


Key considerations:

  • Monitor for signs of price stabilization
  • Watch for potential bounce or further decline
  • Be aware of increased volatility in current market conditions



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