Over the last month, significant movements within the cryptocurrency market have been observed, particularly among large holders of Bitcoin. According to CryptoQuant analyst caueconomy, these holders have sold over 115,000 BTC, valued at approximately $12.7 billion, marking the largest sell-off since July 2022. This trend raises concerns about potential caution among major investors, as evidenced by the significant selling peak recorded on September 3, when more than 95,000 BTC were liquidated— a level not seen since March 2021.
This selling pressure has had an immediate effect on the price of Bitcoin, which briefly dipped below $108,000. Analysts suggest that continued portfolio reduction by large players could exert further pressure on the leading cryptocurrency in the weeks to come. As of the latest reports, Bitcoin is trading around $111,200, reflecting a modest increase of 0.5% over the preceding 24 hours.
Despite this bearish activity, some experts remain optimistic. Nic Raak, director of LVRG Research, highlights a contrasting trend, noting that institutional investors and demand for exchange-traded funds (ETFs) provide a stabilizing force in the market. These institutional activities are contributing to market resilience and are currently preventing Bitcoin from falling below its recent levels. Raak emphasizes that while whale activity could limit Bitcoin’s short-term prospects, the underlying fundamentals of the cryptocurrency remain solid.
Market watchers are advised to monitor the balance between institutional support during price dips and the selling pressure from large holders. Additionally, macroeconomic factors, particularly the Federal Reserve’s rate decision in September, are anticipated to influence overall market direction. The upcoming Fed meeting has created anticipation among market participants, with a consensus expectation of monetary easing emerging.
Interestingly, spot Bitcoin ETFs have attracted $246 million in investment over the past week, although the pace of accumulation by public companies appears to have slowed. While some analysts speculate that a potential Fed rate cut could trigger a bullish rally in Bitcoin within the next quarter, others remain skeptical, noting that the market may have already priced these favorable conditions in.
Rachel Lucas, an analyst at BTC Markets, observes the overall conditions, pointing out that while the U.S. jobs report has strengthened expectations of a more accommodative Fed—typically supportive of risk assets like Bitcoin—the current market dynamics suggest a degree of hesitance among institutional players and subdued ETF inflows, thereby restraining Bitcoin’s upward momentum.
Kronos Research’s CIO, Vincent Liu, echoes this sentiment, suggesting that even in the event of a rate cut, Bitcoin’s price may still face challenges unless there is a significant influx of ETF investments or a genuine increase in liquidity. He notes that achieving levels above $120,000 will be particularly challenging under the current circumstances.
For traders, key support for Bitcoin is identified at $110,000, a threshold that must hold to maintain a constructive market structure. Resistance points are noted at $113,400, $115,400, and $117,100, with a breakout beyond these levels indicating that the market may have absorbed recent sell-offs and is poised to test previous highs.
Furthermore, analysts are keeping an eye on other influencing factors: stablecoin volumes are reaching near-record highs, which could provide capital for growth opportunities, and declining balances of Bitcoin and Ethereum on exchanges suggest a reduction in near-term selling pressure. Regulatory developments, including efforts by the SEC and CFTC towards creating unified rules for the crypto market, are also significant external factors to monitor.
In the midst of these developments, some market participants speculate on a potential “2024-style” bear trap scenario, indicating that Bitcoin may be on the verge of a significant short squeeze, lifting its momentum in the near future.
