TLDR
- Bitcoin (BTC) experienced a selloff over the weekend, trading around $58,500, down 4.8% in the last 24 hours.
- U.S.-listed Bitcoin ETFs recorded outflows of $89 million on Friday, while Ethereum ETFs saw $15.7 million in outflows.
- Long-term Bitcoin holders have been selling some of their coins since August 5, with 4,881 BTC sold on August 10.
- The crypto market may be rangebound with a bias towards weakness ahead of important economic data releases this week.
- Some analysts suggest that Bitcoin’s price could decline further in the short term, possibly to around $60,499.
Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, is experiencing downward pressure as the crypto market enters a period of uncertainty.
Over the weekend, BTC saw a significant selloff, with its price dropping to around $58,500, representing a 4.8% decline in the last 24 hours. This downturn has led to a broader crypto market slide, with the CoinDesk 20 index falling 5.2%.
The recent price action comes amid several concerning indicators for Bitcoin. U.S.-listed Bitcoin ETFs recorded substantial outflows on Friday, with $89 million leaving these investment vehicles.
Similarly, Ethereum ETFs saw outflows of $15.7 million. These movements suggest a shift in investor sentiment, potentially driven by broader economic concerns or profit-taking after recent gains.
Adding to the bearish sentiment, data from Glassnode reveals that long-term Bitcoin holders have been reducing their positions since August 5.
On August 10 alone, this group sold 4,881 BTC, indicating a lack of confidence among typically steadfast investors. The Holder Net Position Change, a metric that tracks long-term holder behavior, has turned negative, which often precedes further price declines.
Market analysts are cautious about Bitcoin’s short-term prospects.
Augustine Fan, head of insights at SOFA.org, suggests that “Crypto prices will likely be rangebound with a bias to the weak side.”
Fan points to technical damage and sentiment drag as contributing factors, noting that on-chain cost models and MVRV (Market Value to Realized Value) models suggest a possible further shakeout before the Federal Reserve’s Jackson Hole symposium.
The crypto market’s current state of flux may be partly attributed to a lack of clear directional cues. With no significant crypto-specific news driving prices, the market appears susceptible to external factors and continued position adjustments based on traditional finance markets.
This week brings a series of important economic data releases that could influence crypto prices. Both the U.K. and the U.S. will release July’s Consumer Price Index (CPI) readings on Wednesday, while Australia’s consumer confidence and Japan’s Producer Price Index (PPI) are scheduled for Tuesday.
Later in the week, major retailers like Alibaba Group and Walmart will report earnings, and updated GDP figures will be released for Hong Kong and Taiwan.
These economic indicators tend to move crypto prices as they reveal spending behavior and the state of the general economy. Favorable releases could potentially sway prices upward if investors feel confident enough to bet on riskier assets like cryptocurrencies. Conversely, disappointing data could drive prices lower as investors shift to safer options.
Some technical analysts are eyeing specific price levels for Bitcoin. The cryptocurrency is approaching a supply zone between $61,616 and $62,477. If Bitcoin reaches this region, it could face rejection and potentially decrease below $60,000. The Awesome Oscillator (AO), a momentum indicator, remains negative despite some bullish cues, suggesting that bearish momentum may still be in play.
However, not all outlooks are pessimistic. Analyst Michaël van de Poppe noted,
It’s still early in the month, but if the monthly candle of $BTC is going to close around $60K, it seems like it’s consolidation before the big bull breakout.
Very likely that we’ll be at the start of;
– The big run of Bitcoin to $250K+
– The surge of #Altcoins pic.twitter.com/Tk7wz3lm95— Michaël van de Poppe (@CryptoMichNL) August 10, 2024
This perspective suggests that the current price action could be a temporary consolidation phase before a potential upward movement.
