Bitcoin (BTC) Price Volatility and Potential Risks
Bitcoin Hodler Behavior Lacks Confidence
Bitcoin holders experienced a sharp drop in price last Monday, with Bitcoin plummeting from $61,000 to $54,000 in a matter of hours. This drastic decline marked one of the worst days of the year for Bitcoin, leading to significant losses and liquidations in the market.
While Bitcoin has since recovered some of its lost highs, data suggests that the price of Bitcoin remains at risk of another potential decline. One key indicator of this concern is the change in the net position of Bitcoin holders.
Holder Net Position Change tracks whether long-term holders are increasing their holdings of Bitcoin or reducing their exposure to the cryptocurrency. A rise in this number indicates that holders are accumulating more Bitcoins, potentially leading to a price increase. Conversely, a decrease suggests that long-term holders are selling off their tokens, putting downward pressure on the price.
Recent data from Glassnode indicates that long-term holders have been selling some of their Bitcoin since August 5, with 4,881 BTC sold on Saturday, August 10.
BTC Price Prediction: $61,000 is a Fragile Level
Currently trading at $61,122, Bitcoin is approaching a supply zone between $61,616 and $62,477 on the daily chart. If Bitcoin reaches this area, it may face rejection and drop below $60,000.
Although there are some bullish signals, the Momentum Oscillator (AO) remains negative, indicating weak momentum and a potential price decline. While a significant correction is unlikely, a drop to $60,499 in the short term is possible.
Additionally, net inflows into spot ETFs have been decreasing, with outflows exceeding inflows on Friday. This trend could make it challenging for Bitcoin to sustain the $60,000 range in the coming week.
Implications for Bitcoin’s Price Stability
The combination of declining ETF inflows, long-term holder selling, and negative momentum signals poses a risk to Bitcoin’s price stability. However, if there is a surge in long-term holder accumulation or a reversal in ETF inflows, Bitcoin’s price could rebound to higher levels such as $63,205 or $67,058.
It’s crucial for investors to monitor these key indicators closely to assess the ongoing market sentiment and potential price movements in the near future.
