Bitcoin's Losses Reach FTX Crash Levels: Where's the Bottom?

Bitcoin (BTC) has retreated to April levels, trading around $83,000. Growing selling pressure has pushed many investors to sell at a loss, reminiscent of major historical market crashes.

According to Glassnode, recorded losses on the leading cryptocurrency have risen to levels not seen since the FTX crash in 2022.

“The scale and speed of the losses reflect a significant erosion of marginal demand as recent buyers are forced to capitulate amid the decline,” the analysts noted.

They also noted that much of the selling during the current digital gold crash is coming from short-term holders.

CryptoQuant analysts share this view, noting that a sell-off on their part often marks a local bottom if the price quickly returns above their cost.

“Otherwise, it historically indicates or confirms a deeper bearish trend,” CryptoQuant says.

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Source: CryptoQuant.

While many market observers note that the current downturn could signal the end of the bull market that began in 2023, some market leaders, such as Samson Mow of Jan3, are denying the start of a crypto winter.

“How can we have a bear market when we haven't even had a real bull market yet?” Mow responded.

Where is the bottom?

Meanwhile, Bitcoin has fallen for the fourth week in a row. The Fear and Greed Index has dropped to “Extreme Fear.”

“We've been going through support levels like butter lately, and it seems like no one wants to try to catch the falling knife,” said Quantum Economics CEO Mati Greenspan.

He doesn't believe the market is heading for a multi-year bear market, but doesn't rule out the possibility that at the current rate of decline, the bears could reach their goals much sooner than expected.

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FTX's November 2022 collapse occurred six months after the Terra Classic (LUNA) crash. Bitcoin then fell from $33,000 in May to below $16,000 by November. Some analysts linked the two events, suggesting that FTX's liquidity crisis may have begun earlier than publicly announced.

Bitcoin dynamics January 2022 – October 2023. Source: CoinGecko.

After bottoming out around $15,700, the leading cryptocurrency remained below $20,000 for two months before beginning its bull market run in 2023, according to CoinGecko.

Some major industry bulls believe the market bottom could come at a similar time this time.

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This article does not contain investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making decisions.