Key Points
- Bitcoin’s price is on the verge of further decline, potentially dropping below $50k over the weekend.
- Increased sell-offs by Bitcoin whales and consecutive days of net cash outflows from US spot Bitcoin ETFs are contributing to the bearish outlook.
After ending Thursday’s trading session below a critical support level of roughly $57k, Bitcoin’s price is on the edge of another bearish week. The leading cryptocurrency fell more than 3 percent in the last 24 hours to trade around $55,360 on Friday, September 6, during the mid-London session. The entire altcoin market followed Bitcoin’s price action, led by Ethereum and Solana.
Short-Term Outlook
The short-term outlook for Bitcoin’s price signals more downturn, which could reverberate across the entire altcoin market. Furthermore, the positive correlation between Bitcoin and altcoins indicates a gradual shift of investors towards web3 investment for higher returns.
Arthur Hayes, BitMEX’s co-founder, suggests that Bitcoin’s price could crash below $50k over the weekend. Veteran trader Peter Brandt echoes this bearish stance, predicting a drop towards $46k in the near term after a macro megaphone formation.
However, if Bitcoin consistently closes above $65k and moves towards $70k in the near term, this bearish outlook could be invalidated. Still, Brandt warns traders that selling pressure outweighs buying sentiment on a weekly time frame.
Impact of Whales Capitulation
Amid Bitcoin’s volatile market, on-chain data analysis reveals that Bitcoin whales have increased their sell-offs. Bitcoin’s fear and greed index has sharply fallen towards 22 percent, indicating extreme market fear of capitulation.
According to an on-chain data analysis by Lookonchain, a whale investor has deposited 4,544 Bitcoins, approximately $265 million, to the Binance exchange in the past seven days. The whale investor deposited 380 Bitcoins, worth over $21 million, to Binance earlier today.
A similar trend has been observed in US spot Bitcoin ETFs, led by Fidelity’s FBTC, in recent days. The US spot Bitcoin ETFs have seen seven consecutive days of net cash outflows. On Thursday, the US spot Bitcoin ETFs registered a net cash outflow of about $211 million, with FBTC contributing $149 million.
Market Overview
With most of the key Bitcoin events having already occurred this year, including the halving and the spot ETF approval, all eyes are 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 into early next year.
Long-term investors, led by BlackRock, have continued to hold without wavering. In addition, the supply of Bitcoin on centralized exchanges has continued to drop significantly over the past five months, despite the overall bearish sentiments.
