Sharp drop in Bitcoin price below average cost may cause short-term holders to panic

Bitcoin is currently trading below the average purchase price of short-term holders, which may lead to panic due to unrealized losses, according to an analyst. The recent drop in price has caused concern among recent buyers, who are statistically more likely to panic. The dip in Bitcoin’s price on May 1, falling 8% below a key support level to $56,814, has contributed to this situation. Although the price has recovered slightly to $57,631, short-term holders still face an average unrealized loss of 3%. The decline in Bitcoin’s price over the past 24 hours has also resulted in the liquidation of $100.27 million in long positions. This decrease in price was driven by a sell-off in the crypto market as investors awaited the US Federal Reserve’s decision on interest rates. Despite the unrealized losses, the analyst reassures short-term holders that breaking their cost basis is not the end of the world or the bull market, as it is recoverable. The short-term holder cost basis typically acts as support during bull periods and resistance during bear periods, and there are several potential events that could indicate the continuation of the bull market. A quick move to $59,600, slightly above the current price, would be considered bullish. Additionally, a sustained period below the cost basis could also signal a bullish trend. It is important to note that this article does not provide investment advice and readers should conduct their own research before making any decisions.