Bitcoin has faced significant volatility, recently dropping from the $69k-$70k resistance zone. Trends among long-term holders show a decrease in active sales, suggesting that sellers may be running out of steam.

At the same time, whale accumulation indicates that the largest Bitcoin holders are becoming more confident despite the falling prices. Recent insights reveal shifts in long-term holder activity, whale behavior, and overall market sentiment amidst ongoing economic concerns.

Bitcoin Faces Resistance and Market Sentiment Shifts

Bitcoin has encountered significant resistance at the $69k-$70k mark, resulting in a sharp decline. Recent market sentiment has been influenced by the Federal Open Market Committee (FOMC) meeting, which diminished hopes of a rate cut in September. This has contributed to a bearish trend in Bitcoin’s weekly timeframe. Additionally, the emergence of the Sahm Rule, which points to potential economic weakness, has heightened fears of a recession and caused panic across markets, including Bitcoin.

Crypto-analyst Axel Adler notes a reduction in active sales among long-term Bitcoin holders compared to early June. This decrease in selling pressure suggests a potential market stabilization. The significant drop in long-term supply indicates intense profit-taking around the $68k-$70k levels, but the current reduced selling pressure might reflect significant seller exhaustion.

Whale activity is a crucial indicator of market confidence. Recent data from Santiment shows that wallets holding between 100k to 1 million BTC have increased their holdings relative to the total supply. This pattern of accumulation, similar to a spike observed in May 2023, suggests that large holders remain confident in Bitcoin’s long-term prospects despite the recent price dip. In contrast, wallets holding between 1k to 100k BTC have reduced their holdings, reflecting selling pressure from smaller whales.

Another important metric to consider is the adjusted Spent Output Profit Ratio (aSOPR), which has been trending bearish since March. When aSOPR values are above 1, it indicates that, on average, coins are being sold at a profit. However, the recent overall decline in aSOPR suggests a bearish outlook, reflecting decreased profitability and increased selling pressure.

In summary, although the reduction in active sales by long-term holders and the accumulation by larger whales are positive signs for Bitcoin, the broader market sentiment remains bearish. The possibility of an economic recession and the lack of immediate bullish catalysts suggest that Bitcoin may face challenges in the near term. Investors should closely monitor on-chain metrics and macroeconomic developments to navigate the current volatile market.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.





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