TechFlow news — Alex Thorn, Head of Research at crypto financial services firm Galaxy Digital, analyzed Bitcoin's sharp decline of over 10% within a few hours on August 17, its subsequent deleveraging process, and the end of Bitcoin’s prolonged period of low volatility.
The key takeaways are as follows:
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Bitcoin futures market open interest saw its largest drop since the FTX collapse in November 2022, losing more than $2.75 billion.
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Short-term holders are facing substantial unrealized losses, which could lead to further downward pressure in the near term.
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Long-term holders continue accumulating, with over 40% of Bitcoin supply now held for more than three years—setting a new all-time high.
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Accumulation by small holders (<=10 BTC) has not yet reached the levels observed during previous drawdowns in 2023.
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$25,000 is a critical technical support level.
He stated that this rapid sell-off cleared excessive leverage, resulting in the most thorough market reset since the FTX collapse. In the absence of strong positive catalysts, downside risks remain dominant in the near term, with $24,000 and $25,000 viewed as key support levels. Indeed, if a swift rebound does not occur, nearly 90% of short-term holdings will remain underwater, creating additional downward pressure. Both long-term and small holders continue to accumulate steadily.
