Bitcoin Demand Void Worse Than Luna Collapse… “If $60,000 Falls, It’s Over”

▲ Bitcoin (BTC) decline / ChatGPT-generated image

On-chain analysis indicates that demand for Bitcoin (BTC) has contracted even more severely than during the 2022 LUNA collapse, heightening tensions over the potential breakdown of the psychological support level at $60,000.

According to cryptocurrency-focused outlet CoinGape on February 17 (local time), on-chain analytics firm Glassnode assessed that Bitcoin’s current price movement is facing a more severe demand shortage than in the immediate aftermath of the LUNA crash. Glassnode analyzed that the accumulation observed following the recent price decline is markedly weaker compared to the rebound demand during the LUNA incident or the strong dip-buying activity seen after last November’s sharp drop. In particular, the indicator measuring the proportion of long-term holders (LTHs) in loss has fallen to levels previously seen only during the deepening phases of past bear markets, raising concerns that investor conviction is wavering.

From a technical perspective, Bitcoin is currently using the $65,000 level as support, but if this zone collapses, there is a significant risk of a sharp drop toward the Realized Price at $54,000. Glassnode pointed out that structurally declining spot trading volumes have created a demand vacuum, which could accelerate price declines when selling pressure emerges. Veteran trader Peter Brandt warned that if the downtrend deepens, Bitcoin could plunge to the $40,000 level, urging investors to exercise caution.

On-chain data analytics platform CryptoQuant also maintains that the market bottom has not yet been confirmed. The firm noted that in previous cycles, Bitcoin prices fell 24% to 30% below the Realized Price and then spent several months consolidating before forming a bottom. Currently, Bitcoin is still trading above its Realized Price, and there are no clear signs of large-scale capitulation by long-term holders selling at a loss. CryptoQuant projected that a test of the $55,000 level, near the Realized Price, would likely be necessary to establish a true market bottom.

Options market data also supports continued downside pressure. According to data from crypto options exchange Deribit, a significant concentration of put options is clustered around the $58,000 level. A break below this zone could trigger a chain of forced liquidations, increasing market volatility. Experts warned that if the psychological support level of $60,000 collapses, investor sentiment could rapidly freeze, potentially escalating into a broader liquidity crisis across the market.

The digital asset market is currently in a fragile equilibrium, caught between a lack of demand and potential selling pressure. Glassnode analyzed that without a recovery in spot market trading activity, a self-sustaining price rebound is unlikely. Investors are advised to closely monitor real-time volume changes and key support levels, while adopting conservative capital management strategies to prepare for unprecedented volatility.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses incurred based on it. The content should be interpreted solely for informational purposes.*