Bitcoin (BTC) Price Analysis: Potential Decline Looms Despite Recent Recovery
Last Monday, Bitcoin (BTC) holders experienced a significant price drop, with the value plummeting from $61,000 to $54,000 within a few hours. This sudden decline marked one of the worst days of the year for Bitcoin, causing substantial losses and liquidations for investors. While Bitcoin has since regained some of its lost ground, indicators suggest that the cryptocurrency may still be at risk of another downward movement.
Bitcoin Holders Showing Lack of Confidence
One key indicator pointing towards a potential decline is the behavior of net Bitcoin holders. The Holder Net Position Change metric tracks whether long-term holders are increasing their Bitcoin holdings or reducing their exposure to the cryptocurrency. An increase in this metric signifies accumulation by long-term holders, indicating a potential price increase. Conversely, a decline suggests that long-term holders are selling off their Bitcoin, exerting downward pressure on the price.
According to data from Glassnode, long-term holders have been reducing their positions since August 5, with a significant sell-off of 4,881 BTC recorded on Saturday, August 10.
In addition, the net inflows into spot ETFs have been decreasing alongside falling prices. Over the past week, 12 Bitcoin ETFs experienced outflows, with net inflows totaling -$89.73 million on Friday, outweighed by outflows. This trend is in contrast to the surge in ETF inflows that contributed to Bitcoin reaching an all-time high of $73,750 in March.
BTC Price Prediction: Vulnerability Around $61,000 Level
Currently trading at $61,122, Bitcoin is approaching a key supply zone between $61,616 and $62,477. If the cryptocurrency reaches this area, it may face resistance and fall back below the $60,000 mark. Despite some bullish signals, the Momentum Oscillator (AO) remains negative, indicating weak momentum and a possible impending decline.
While a double-digit correction is unlikely, a drop to $60,499 in the short term is possible. However, if ETF inflows start to rise again and long-term holders continue to accumulate Bitcoin, this bearish scenario could be invalidated, potentially leading to a rebound towards $63,205 or $67,058.
