Bitcoin reversed course in classic fashion on Thursday after the bulls ran out of strength and were unable to hold higher levels.
The world’s largest cryptocurrency by market cap is currently changing hands at $38,859.65, essentially the same price as at the start of the week.
Those in the cryptoverse anticipating the continuation of Wednesday’s roaring rally were therefore disappointed, with total liquidations over the past day surging past $150 million at publication time, according to data from analytics platform Coinglass.
Onchain analyst Willy Woo speculated that there’s a certain group of market participants that are adding to the selling pressure. Woo notes that the earliest investors that bought BTC for around $200 are dumping so that they can scoop up the cryptocurrency at a steeper discount.
Per the game theory concept, buyers who got their assets at a considerably lower price than the rest of the market and are still holding onto their stash will be happy to acquire the asset at even lower prices. This is because their return on investment (ROI) is already sky-high.
The statistician indicates that such investors don’t mind if the bulls capitulate as it will mean even more insane crypto returns.
Woo’s comment was in response to a Twitter user who suggested that BTC investors HODLing from $60,000 to $30,000 will not dump the flagship crypto even if it tumbles to the $20K mark. Put simply, investors drowning in crippling losses will possibly continue holding their assets despite the market meltdown extending their losses.
Bitcoin Sinks Further From $40,000 While Crypto Stocks Shine Bright
As bitcoin endures more losses, investors who play the long-term game in crypto assets without exposing themselves to the wild swings in the market are all smiles.
The stock prices of cryptocurrency-related companies like Coinbase and MicroStrategy are soaring on the back of President Biden’s executive order. Coinbase soared over 10% since market close yesterday, while shares in bitcoin advocate Michael Saylor’s MicroStrategy registered a 6.42% gain.
Other significant digital assets-related stocks are also standout winners. PayPal rose 5.2% and Elon Musk’s Tesla has surged by over 4%. Crypto mining companies have posted the biggest gains, with Marathon up almost 14% and Riot jumping 11%.