Fear of further Bitcoin price capitulation in the short term significantly increased amid continued sell-offs from whale investors.
After closing Thursday trading below a crucial support level of around $57k, Bitcoin (BTC) price is on the brink of registering another bearish week. The flagship coin dropped over 3 percent in the past 24 hours to trade about $55,360 on Friday, September 6, during the mid-London session. Consequently, the entire altcoin industry followed Bitcoin price action in tandem led by Ethereum (ETH), and Solana Solana (SOL).
The short-term Bitcoin price outlook has signaled more pain, which could reverberate in the entire altcoin industry. Moreover, the correlation between Bitcoin and the altcoins is positive, which indicates more investors are gradually shifting to web3 investment for higher returns.
According to Arthur Hayes, co-founder of BitMEX, Bitcoin price could crash below $50k during this weekend. A similar bearish stance was issued by veteran trader Peter Brandt, who noted that Bitcoin price is likely to drop towards $46k in the near term after forming a macro megaphone.
This is called an inverted expanding triangle or a megaphone. A test of the lower boundary would be to 46,000 or so. A massive thrust into new ATHs is required to get this bull market back on track $BTC
Selling is stronger than buying in this pattern pic.twitter.com/ekDZUJXXgd— Peter Brandt (@PeterLBrandt) September 5, 2024
However, Bitcoin’s bearish outlook could be invalidated if the flagship coin consistently closes above $65k and pumps toward $70k in the near term. Nevertheless, Brandt cautioned traders that selling pressure is higher than buying sentiment in the weekly time frame.
Bitcoin Price Impacted by Whales Capitulation
Amid the ongoing Bitcoin’s choppy market, on-chain data analysis shows whales have accelerated the pace of BTC sell-offs. Already, Bitcoin’s fear and greed index has fallen sharply towards 22 percent, which represents extreme market fear of capitulation ahead.
According to on-chain data analysis conducted by Lookonchain, a whale investor has deposited 4,544 Bitcoins worth about $265 million to the Binance exchange in the past seven days. Earlier today, the whale investor deposited 380 Bitcoins, worth over $21 million, to Binance.
A whale deposited 380 $BTC($21.34M) to #Binance again 4 hours ago.
And the whale has deposited a total of 4,544 $BTC($265M) to #Binance in the past 7 days.https://t.co/yCAMkUhWQR pic.twitter.com/CgeiM2NWYw
— Lookonchain (@lookonchain) September 6, 2024
A similar trend has been observed in the US spot Bitcoin ETFs, led by Fidelity’s FBTC, in the past few days. As Coinspeaker reported, the US spot Bitcoin ETFs have registered seven consecutive days of net cash outflow. On Thursday, the US spot Bitcoin ETFs registered a net cash outflow of about $211 million, majorly contributed by FBTC’s $149 million.
Market Picture
With the majority of the key Bitcoin events having already happened year to date, including the halving and the spot ETF approval, all attention is on the anticipated Fed’s interest rate cut on September 18.
The ongoing market shift is expected to trigger a larger bull market in the fourth quarter that will extend early next year.
Meanwhile, long-term investors, led by BlackRock, have continued to hold without wavering. Moreover, the supply of Bitcoin on centralized exchanges has continued to drop exponentially in the past five months despite the overall bearish sentiments.
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