The possibility of further crypto selloffs in the near term increased as Bitcoin’s (BTC) price closed below the crucial support level of around $57k on Thursday. The flagship coin has dropped over 4 percent this week to trade about $56,786 on Friday, September 6, during the early Asian session.
With the altcoin industry continuing to show further mid-term bearish sentiment, investors have shied away from buying until the correction cools off. Bitcoin’s fear and greed index dropped to 22 percent on Friday, denoting 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 in the past week after closing August with a bearish outlook, which signaled further weakness in September. For instance, the 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. Worth noting that BlackRock’s IBIT has not registered any cash outflow in the recent past.
Meanwhile, on-chain data shows several whales have deposited their Bitcoins into exchanges in the past few days.
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
Nevertheless, the overall supply of Bitcoin on centralized exchanges has continued to drop in the past five months, suggesting the ongoing market correction has not shaken long-term holders.
BTC Price Expectations
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
According to veteran trader Peter Brandt, Bitcoin price has been forming a macro megaphone, which precedes a major bullish outlook, but the bearish sentiments have outweighed the buyers.
A similar narrative has been made by Arthur Hayes, co-founder of Bitmex, who highlighted that Bitcoin price will likely drop below $50k in the near term before rebounding to an all-time high.
Despite the anticipated interest rate cut in the coming weeks, Brandt believes the BTC price is headed to retest the support level of around $46k.