The possibility of further crypto selloffs in the near term increased as Bitcoin’s (BTC) price closed below the crucial support level of around $57,000 on Thursday. The flagship cryptocurrency has dropped over 4 percent this week, trading at approximately $56,786 on Friday, September 6, during the early Asian session. With the altcoin industry continuing to exhibit mid-term bearish sentiment, investors have been hesitant to buy until the correction stabilizes. Bitcoin’s fear and greed index dropped to 22 percent on Friday, indicating an extreme fear of capitulation ahead.
Whale Traders Are Wary of Short-Term Volatility for Bitcoin
The demand for Bitcoin among whale traders has significantly declined over the past week, following a bearish outlook at the close of August, which signaled further weakness into September. For instance, US spot Bitcoin ETFs have registered seven consecutive days of notable cash outflows. On Thursday, the US spot Bitcoin ETFs reported a net cash outflow of about $211 million, led by Fidelity’s FBTC. It is worth noting that BlackRock’s IBIT has not registered any cash outflow in recent times.
Meanwhile, on-chain data reveals that several whales have deposited their Bitcoins into exchanges in the past few days. Nevertheless, the overall supply of Bitcoin on centralized exchanges has continued to decrease over the last five months, suggesting that the ongoing market correction has not significantly affected long-term holders.
BTC Price Expectations
According to veteran trader Peter Brandt, Bitcoin’s price has been forming a macro megaphone pattern, which usually precedes a major bullish outlook. However, bearish sentiments have currently outweighed the buyers. Brandt suggests that a test of the lower boundary of this pattern could see Bitcoin drop to around $46,000. He believes a massive thrust into new all-time highs (ATHs) is required to get this bull market back on track.
A similar viewpoint is shared by Arthur Hayes, co-founder of Bitmex, who highlighted that Bitcoin’s price might drop below $50,000 in the near term before rebounding to an all-time high. Despite the anticipated interest rate cut in the coming weeks, Brandt foresees the BTC price retesting the support level at around $46,000.
In conclusion, the current market sentiment indicates caution among investors, particularly whale traders, as Bitcoin continues to navigate short-term volatility. Long-term holders appear resilient, with the overall supply on centralized exchanges slowly declining. However, market analysts suggest that further price drops could occur before Bitcoin achieves new highs.
Also Read: Top Altcoins To Buy Before Ethereum (ETH) Reclaims $2.5K
