Analysts still see an upcoming bullish trend for Bitcoin despite the recent pullback

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Bitcoin dropping back to earth to nearly $ 60,000 is part of a healthy pullback, and analysts are still predicting an uptrend ahead.

Part of the recent massive sell-off could be that long-time holders are leaving their positions. With the main cryptocurrency reaching nearly $ 70,000, profit taking contributes to the outflow of capital.

“Long-term Bitcoin holders appear to be taking profits, reducing their net holdings for the first time since May, according to blockchain data provider Glassnode and Fundstrat Digital Asset Research,” reports a Barron article.

The exits from profit-taking measures, however, are being offset by new investors taking positions in bitcoin, Fundstrat analysts say. This mismatch leads analysts to believe that there is more optimism ahead for bitcoin.

“Short-term holders come back into the market and provide the necessary liquidity to long-term holders,” said Sean Farrell and Will McEvoy, analysts at Fundstrat. “Short term holders entering the fold is a good sign as it provides exit liquidity to longer term holders.”

China’s crackdown on crypto mining

In an effort to become more energy efficient and reduce its carbon footprint, China is starting to crack down on cryptocurrency mining activities. It could also be a contributing factor to the recent decline of bitcoin.

“Chinese authorities are stepping up crackdown on crypto mining, calling it an ‘extremely harmful’ practice that threatens to undermine the country’s efforts to reduce carbon emissions,” CNN reports. National Development and Reform Commission spokesperson Meng Wei blasted bitcoin mining at a press conference in Beijing on Tuesday. She said the activity “consumes a lot of energy. “and” produces a lot of carbon emissions “.

This is not the first time that China has taken overt steps to curtail cryptocurrency activity. The country has used its regulatory power to try to prevent financial activities that circumvent government control.

The recent crackdowns don’t necessarily reflect China’s rejection of cryptocurrencies as a whole. The country has previously discussed releasing a digital version of its fiat currency, the yuan, as the central bank’s digital currency (CBDC).

Like every drastic step, the switch to the digital yuan is not without its detractors. Critics criticized the idea as a way for the Chinese government to exercise increased control.

“I think CBDCs are currently at risk of being massively overrated and under-delivered,” said Garrick Hileman, head of research at crypto firm Blockchain.com. “The issues that need to be discussed to design an effective CBDC – like confidentiality, like surveillance – are things that are well above the pay level of every central banker.”

For more news, information, and strategy, visit Crypto Channel.

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