In the world of cryptocurrency, Bitcoin has always been the focus of much attention. However, the recent sharp drop in Bitcoin prices has attracted widespread attention and discussion. What exactly caused this drastic fluctuation? Let's delve into the statistics and technical analysis of the BTC Bitcoin network to reveal the secrets behind it.

 Analysis of the reasons for the sharp drop in Bitcoin prices

The sharp drop in Bitcoin prices did not come out of the blue, but was gradually revealed by a variety of factors. First, the increase in global economic instability has exacerbated the panic in the market to a certain extent, and investors have begun to seek safe-haven assets, resulting in increased selling pressure on high-risk assets such as Bitcoin. In addition, the uncertainty of regulatory policies has also made investors worried that cryptocurrencies such as Bitcoin will face stricter supervision, which in turn affects market confidence.

 BTC Bitcoin Network Statistics Revealed

By analyzing the statistics of the BTC Bitcoin network, we can have a clearer understanding of some of the technical factors behind the sharp drop in Bitcoin prices. Recently, the transaction volume of the Bitcoin network has shown obvious fluctuations, and the reduction in trading activities may be one of the important reasons for the price drop. In addition, the computing power of the Bitcoin network has also fluctuated, and the withdrawal of some miners has affected the security of the network to a certain extent, which in turn affected the market's confidence in Bitcoin.

 Technical analysis reveals the law of price fluctuations

Technical analysis is one of the important tools for studying Bitcoin price fluctuations. Through the analysis of Bitcoin price charts, we can find that price fluctuations are often accompanied by changes in trading volume, and the increase in trading volume may indicate a further drop in prices. In addition, technical indicators such as moving averages and relative strength indicators can also help us better grasp the market trend and adjust investment strategies in a timely manner.

 Bitcoin market analysis and future prospects

In the current market environment, the future trend of Bitcoin prices is full of uncertainty. However, as a global digital currency, Bitcoin still has long-term investment value. With the continuous development and improvement of blockchain technology, Bitcoin is expected to become an important cornerstone of the future digital economy. Investors can remain rational and seize the opportunity to build positions at low levels. Long-term holding of Bitcoin may bring considerable returns.

 Summary

Behind the sharp drop in Bitcoin prices are both the impact of the global economic environment and the role of internal factors such as Bitcoin network data and technical analysis. When facing market fluctuations, investors need to treat them rationally, combine fundamentals and technical analysis, and formulate reasonable investment strategies. In the future, Bitcoin, as an emerging digital asset, will continue to play an important role globally. Investors can seize opportunities and grasp future investment opportunities. I hope every investor can manage risks in the world of digital currency and create a new chapter of wealth!

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Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
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Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Bitcoin has lost more than $20 billion in market value in recent days. The flagship cryptocurrency traded from around $8,000 on Wednesday to today’s low of $6,800. As the sell-off continues, IntoTheBlock believes that multiple blockchain analysis factors can explain the drop. Meanwhile, CryptoSlate takes a technical approach.

Bitcoin Blockchain Analysis

In a blog post, IntoTheBlock’s CTO Jesus
Rodriguez explained different blockchain patterns that paint ideas about the market downturn and where it might go in the future based on the company’s statistical model. He said that blockchain activity can provide insights into events that are currently unfolding and provide clues about the near future.

According to Rodriguez, the “In/Out of Funds” model considers the distribution of Bitcoin across wallets based on the current price. According to this representation, there are 1 million addresses with balances between $6,600 and $7,350 containing 730,000
BTC that can serve as support. However, if the sell-off continues, the next significant support levels are around $4,200 and $6,600, with over 3.6 million addresses holding nearly 2 million BTC.

On the bright side, there is some resistance between $7,350 and $7,970, as 1.4 million addresses hold 941,000 BTC. However, strong resistance lies between $8,000 and $8,800, with 3 million addresses holding 1.9 million BTC.

Money in/out. Source: IntoTheBlock

Despite Bitcoin’s more than 22% plunge since last week, the number of large transactions worth $100,000 or more has remained relatively stable. On November 14, there were nearly 13,000 large transactions on the network, while today, there were over 16,000. Rodriguez sees this as a sign of “confidence and trading activity.”

Large transactions. Source: IntoTheBlock

This level of “confidence and trading activity” appears to be coming primarily from Western markets. Nearly 55% of all Bitcoin was traded between 10:01 a.m. and 10:00 p.m. (UTC) in the West.

Bitcoin trading volume by geographic region. Source: IntoTheBlock

Meanwhile, Eastern markets have held back from trading Bitcoin and moved into stablecoins, such as Tether. This is common during large market pullbacks as investors look to protect their capital from falling prices.

China’s efforts to “regulate, control and clamp down on cryptocurrency trading” across the country may also be affecting trading activity in the East. As a result, nearly 54% of Asian investors have moved into stablecoins.

Tether trading volume by region. Source: IntoTheBlock

BTC technical analysis

The analysis provided by IntoTheBlock’s CTO seems to coincide with what can be viewed from a technical perspective on Bitcoin’s price chart.

For example, according to the 1-week chart, the anticipation for a near-term decline is the parallel descending channel that has been developing on this timeframe since the week of June 24. Since then, every time BTC reaches the bottom of the channel, it bounces back to the middle or top. However, when it reaches the top, it returns to the middle or bottom.

Bitcoin has now fallen to the bottom of the channel again at $6,900 after retracing from the Oct. 26 high. If this technical formation continues to suppress Bitcoin's price, a bounce to the middle or top of the channel is very likely as the current support level is backed by 1 million addresses holding 730,000
BTC.

BTC/USD via TradingView

The TD sequential indicator also adds credibility to the idea of a rebound from current levels. The technical index recently issued a buy signal in the form of a red 9 candlestick on the 1-day and 12-hour charts. If validated, Bitcoin could rise by one to four candlesticks or start a new bullish countdown. Two green candlesticks trading above the previous green candle could confirm the rise.

If Bitcoin is indeed set to rise, it will face strong resistance near the 50% Fibonacci retracement level. Rodriguez also sees 3 million addresses containing 1.9 million BTC in this area, which could weigh on potential bullish impulses.

BTC/USD via TradingView

It is worth noting that if Bitcoin is able to break above this resistance cluster, it will likely resume the uptrend that started earlier this year. This is considering that the descending parallel channel on the 1-week chart is part of the bull flag. The move by the pioneer cryptocurrency to reach nearly $14,000 created the flagpole. And, the current consolidation period is developing.

This continuation pattern could lead to a breakout in the same direction as the previous trend. By measuring the height of the flagpole, the bull flag has an estimated upside target of 76.5%. If validated, Bitcoin could move to $15,000.

BTC/USD via TradingView

Nevertheless, a close below the 65% Fibonacci retracement level near $6,900 could invalidate the bullish outlook. If this happens, Bitcoin could push downwards to the 70% or 88.6% Fibonacci retracement levels between $6,400 and $4,400. As Rodriguez explained, this area could offer considerable support as there are 3.6 million addresses with nearly 2 million BTC.

Moving Forward

Bitcoin’s recent price action has created an extremely pessimistic view of Bitcoin’s future. Former U.S. Treasury and IMF economist Mark
Dow believes that Bitcoin is “dying.” Moreover, the overall market sentiment has turned into “extreme fear” according to the Crypto Fear and Greed Index (CFGI).

Despite the pessimism among investors, Warren Buffett once said, “Be fearful when others are greedy, and be greedy when others are fearful.”

According to historical data, whenever the CFGI falls into “extreme fear,” it provides a buying opportunity. Meanwhile, previously provided network statistics and technical analysis estimate strong support around current levels. Now, it remains to be seen whether Bitcoin will be able to rebound or continue to fall to the next support level of $6,400 or lower.