After Bitcoin first slumped below $ 60,000 on November 16, the chants of “Buy the Dip” soared in anticipation of a rebound. The king coin, however, had other plans. The price of BTC fell from a high of $ 66,281 to a low of $ 55,641 in just one week. This has put the market in a panic mode.

Panic takeover?

With general market sentiment looking bearish after another dip on Nov 23, sentiment played catching up as the spot price contrasted with the metrics’ larger bullish signals. As measured by the Crypto Fear & Greed Index, sentiment had changed to more in line with the spot market and noted “Fear” for the day.

So if the mood turns into panic, what about that drawdown that fueled the market with such sentiments? Well, to be honest, not much. In particular, the current drawdown has lasted 13 days (at the time of writing) as the current price was 19% below the ATH price. Interestingly, this drawdown isn’t even big compared to the previous ones.

Source: Ecoinometry

In fact, there have been multiple drawdowns during this cycle that fell within the same range as this one, as can be seen in the graph above. The March drawdown lasted a month and bottomed at around 18%, while the February drawdown lasted 18 days and hit a low of around 25%. In retrospect, this shouldn’t bother the participants too much, should it? Well, until now, not only has the price action been a confusing market situation, but also the metrics.

Unique deviations

Data from Glassnode showed that long-term BTC HODLers were at multi-year highs. The markets may not yet be saturated with profit taking as this cohort appeared to be reducing its spending while continuing to add to its positions.

Looking at the Spent Volume Age Bands (SVAB), sentiment and trend analysis can be performed by identifying when the process of profit-taking or accumulation might begin. It is noteworthy that the continuous issuance of coins older than 1 month (> 5% of daily BTC on-chain volume) started in November 2020 and ended in April-May 2021.

After hitting a low of around $ 30,000, Bitcoin saw an SVAB spike to $ 40,000 in August and another over $ 60,000 in October, as can be seen in the chart below.

Source: Glassnode

Since then, SVAB levels have returned to 2.5% of the daily volume, suggesting that older coins are increasingly dormant, even more so as the price declines. This would arguably mean that longer-term HODLers reduce their spending and are more likely to increase their positions.

Additionally, the total supply held by STHs is at a multi-year low of less than 3 million BTC, which in turn means that LTH supply is at a multi-year high.

Source: Glassnode

The above data is typically seen at the end of bear markets and in early bull markets, usually after long periods of accumulation. This time, however, it is a unique case when the price is close to ATH and the LTH supply is also at the ATH level. This could mean interesting twists and turns in BTC prices in the future.

That being said, BTC’s monthly retest is still intact despite the downside volatility as the coin was still testing the monthly level of 58.7K as a support. So it looks like the BTC price could continue to fluctuate before the end of the month and a new month with new highs may (or may not) come. That said, the coin’s long-term outlook looked good for the time being as the top coin tested the nearly $ 55,000 level at press time.

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