A brutal sell-off occurred once again in the cryptocurrency market with Bitcoin dropping below $47,000 on Monday, December 13 and continuing into the morning of Tuesday, December 14.

As of press time, it appears that Bitcoin has yet to recover from Monday’s lows as it is still currently trading at just under $47,000 with a total market capitalization of $884 billion.

Interestingly, despite the continued pressure on the bitcoin price, the supply of bitcoin on the trading platforms is simultaneously declining to reach its lowest level in 31 months.

This is what the data analysis platform “Santiment” indicated, as its post came as follows:

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The supply of bitcoin on exchanges has not been this low in 31 months.

Prices have been volatile lately, but the fact that Bitcoin has not yet moved onto the exchanges is a positive sign that major selling risks should be limited.

While many have been comparing the recent market sell-off with that of May 2021, the bitcoin price has already corrected nearly 40% from its all-time high of $69,000.

From an on-chain perspective, here’s the main difference between Now and May:

May: Formerly strong hands become weak hands

Now: Buying Strong Hands From Weak Hands pic.twitter.com/kMe75YN732

– Will Clemente (@WClementeIII) December 14, 2021

There is one key difference between the May correction and the current one, says Will Clementelli, cryptocurrency market analyst, and explains:

During the May period, there were big sell-offs by strong hands (whales).

While at the moment strong hands are buying more bitcoin.

Analyst Willie Wu said there were no signs of further consecutive selling.

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The major long positions of Bitcoin futures were liquidated in the recent price correction indicating some kind of reset and positioning.

Additionally, based on the buying/selling heatmap, crypto analyst Willy Wu says the dip buying has been clearly visualized.

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He added:

Buy the visible drop (spot sizes seen on the chain).

It has been happening, it is moderate, now and so far there are no indications of another series of selling.

It is also worth bearing in mind that long purchases have already been cleared.

As retail investors continue to face a test of patience and anxiety, the on-chain data was pointing to strength.

Will this translate into a good recovery or not?

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