Bitcoin drops below $60K as whales and STHs sell
The Essentials at a Glance
- Bitcoin (BTC) once again fell below the 60,000 USD mark after briefly surpassing it.
- The decline is being exacerbated by sales from short-term holders (STHs) and whales.
- Long-term holders (LTHs) may enter the market if the price drops further.
- Macroeconomic factors could further influence the price.
Bitcoin Falls Below 60,000 USD – What’s Behind It?
Bitcoin (BTC) has lost value again in recent days, falling below the 60,000 USD mark. After a brief surge above this psychologically significant threshold over the weekend, the price dropped back to around 58,580 USD. This has sparked renewed discussions within the crypto community about the reasons behind the decline. But what are the main factors that have contributed to this price drop?
Profit-Taking by Short-Term Holders (STHs)
An analysis of the daily price movement shows that many short-term holders (STHs) took profits after a series of six consecutive green candles. This is typical behaviour, especially following a previous price drop in August when Bitcoin fell below 55,000 USD. As soon as the price rose again, many investors took the opportunity to liquidate their positions before the upward momentum lost steam.
Different Strategies of STHs and LTHs
A look at the behaviour of STHs and LTHs reveals that these groups respond differently to market fluctuations. While STHs tend to sell their holdings once the price reaches a high, LTHs wait for price declines to increase their holdings. This pattern often repeats itself: STHs sell when the price hits a certain level, causing a drop that LTHs then use as an opportunity to buy.
Increased Selling Pressure from Whales
In addition to the sales by STHs, whales – investors with large Bitcoin holdings – have also reduced their positions. This has further increased the selling pressure, pushing the price down. The so-called STH-SOPR indicator, which measures the ratio of realized profits and losses, rose significantly after the price surpassed 60,500 USD, indicating increased profit-taking.
What’s Next?
The question many investors are now asking is whether the price will fall further. A look at the MVRV momentum indicator shows that the downward trend has persisted since June when Bitcoin fell below 66,750 USD. If the price breaks the support at 58,100 USD, a further drop to 55,000 USD could follow. Historically, LTHs have bought Bitcoin more aggressively during such phases, leading to a recovery.
Macroeconomic Factors in Focus
In addition to internal market mechanisms, external macroeconomic factors could also influence the price of Bitcoin. For example, decisions by the U.S. Federal Reserve (Fed), such as a rate cut, could boost demand for Bitcoin. However, a price reversal is only likely if either a strong bull market emerges or the price falls to 55,000 USD, prompting LTHs to buy.
Our Assessment
The current decline in Bitcoin appears to be primarily driven by sales from short-term holders and whales. Long-term holders may re-enter the market if the price drops further. It remains to be seen whether macroeconomic factors, such as a potential Fed rate cut, will support the price. Until then, caution is advised, as another drop to 55,000 USD cannot be ruled out.
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