On-Chain Analysts Weigh In On Bitcoin’s Volatility

Bitcoin briefly surpassed $95,500 after a rapid decline, with volatility currently elevated. Crypto markets have remained unstable since October 10th. Two on-chain analysts offered insights into the current situation and potential future developments.

According to data observed at the time of writing, Bitcoin unexpectedly jumped from approximately $94,000 to $96,000, mirroring patterns of previous downturns. Ki Young Ju, CEO of CryptoQuant, a prominent on-chain analyst, initially predicted a decline lasting 6-12 months, but noted that recent signals have contradicted his forecast. He stated the current dip stems from a shift among long-term Bitcoin holders, who are selling to institutional investors.

Ki Young Ju highlighted that he anticipated the initial surge due to significant selling by original Bitcoin whales. However, the market structure has since changed due to the introduction of new liquidity through ETFs and other channels. He noted that on-chain inflows remain robust, and the current dip is primarily driven by sales from these original whales. He anticipates continued cycles until institutional and governmental funds further establish new liquidity channels.

Another on-chain analyst, Anılcnc1, acknowledges a shift in sentiment, suggesting long-term investors’ motivation to accumulate during dips has diminished, potentially exacerbated by factors such as government shutdowns. He draws parallels to the 2018 market downturn, where institutional fear, uncertainty, and doubt (FUD) significantly weakened interest.

Anılcnc1 emphasized the importance of monitoring renewed price increases to ascertain whether this indicates a positive trend, adding that losing long-term holders would be detrimental. He believes ongoing market observation is key to determining the subsequent direction.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.