Despite the steep drop on September 7, long-term Bitcoin investors’ positions have remained rock strong. Furthermore, we are witnessing a deeper supply shock as the number of BTC on exchanges continues to fall.
The variety of addresses holding various BTC values, the majority of which rose during the recent fall, exemplifies the Bitcoin network’s organic expansion. In addition, on-chain data indicates that the recent big price fall resulted from overleveraged derivatives traders.
On September 7, Bitcoin achieved a local high of $52,956, slightly above the 0.618 Fib retracement line. However, on the same day, a flash crash sent the BTC price down to $42,900.
One of the causes for the 19% drop was the liquidation of long leveraged holdings, which resulted in $4 billion in liquidations.
Shortly after the severe drop, the price recovered and is again attempting to regain about $46,000. However, despite the short-term comeback, technical indications at greater time intervals are beginning to become negative.
However, it is worth mentioning that the fall has served to verify the long-term region of support around the 0.382 Fib retracement. This zone corresponds to horizontal support levels and Bitcoin’s historic all-time high of January 8, 2021.
Finally, regardless of the quantity of BTC owned, the overall trend in the number of addresses is not decreasing. This demonstrates the Bitcoin network’s robust organic development and the rising distribution of coins as the number of tiny addresses continues to expand.