A seasoned market expert has shed light on Bitcoin's current bearish performance, noting that the small price correction that has led to a significant liquidation of BTC positions is “healthy and reasonable,” addressing concerns about its future potential.
Bitcoin's Bearish Move Not A Thing To Worry About?
Bitcoin's recent upward rally witnessed earlier last week was short-lived as the largest cryptocurrency asset has begun to trend downward, raising speculations about its short-term performance among investors as the United States Presidential election is just around the corner.
However, crypto analyst and trader, Doctor Profit, claims the slight pullback is a positive move, suggesting an optimistic market signal for BTC. Before the subsequent step upward, this cooling-off period might allow for consolidation, strengthening the sentiment of short and long-term holders.
According to Doctor Profit, a month ago, Bitcoin surpassed the previous high of $65,000thereby printing a new higher high for the first time since its all-time high in March. This casts doubt on the much-discussed theory of higher highs and lower lows, which was cited by many pessimistic analysts as proof that BTC would keep declining.
He highlighted that Bitcoin is currently 8.8% down from its peak on Tuesday. Given the enormous gain seen over the past two weeks, this drop is reasonable and a healthy correction.
The brief pullback was due to a shift in market sentiment toward the possibility that Vice President Kamala Harris will win the upcoming US presidential election, scheduled to take place on November 4. “The market is simply pricing in the effects of a possible Harris scenario, hence the dump,” he added. While Doctor Profit believes Harris' victory will not be super bullish for crypto, he is confident that former US president Donald Trump winning the election will be super bullish for crypto.
Regardless of whether Trump or Harris wins the election, the expert noted that it will still not stop the Federal Reserve's (Fed) commitment to continuous printing. As a result, he has urged investors to remain steadfast because nothing changes in the mid to long term since the overall trend is still upward in the broader outlook.
OTC Desks Running Out Of BTC
Doctor Profit also pointed out that Bitcoin's supply on over-the-counter (OTC) desk has drastically decreased, indicating a rising shortage of BTC amidst growing demand from institutional and large-scale investors.
According to the expert, CryptoQuant claims that their OTC desk balance is significantly skewed, with 400,000 BTC on OTC, while several X (formerly Twitter) accounts have reported that OTC desks have reached out to buy BTC, suggesting that CryptoQuant might be tampering with the numbers for personal gains.
However, the available BTC on OTC desks is between 110,000 and 130,000, which implies that over 300,000 BTC have been sold in past months since March. In general, this shows that consumers are being forced to buy directly from crypto exchanges, leading to more notable and steep price spikes.
Featured image from Unsplash, chart from Tradingview.com
