Bitcoin is once again in a tough zone and the entire crypto market is feeling the heat. The BTC price has fallen below a key support level and fear is spreading in the market. Whales are making waves and diamond hands remain strong, but still the market fails to rise. Let’s take a look at what’s happening and what it could mean for Bitcoin.
A big drop in Bitcoin support
Bitcoin failed to hold the support at $60,680. The largest crypto has been moving in a parallel channel for over six months now and we have discussed the risks in our previous articles. At current levels, only the median line acts as an active support for the price. What makes matters worse is that moving averages (MAs) do not provide any support as all averages are currently above the price on the daily chart.
The nearest MA, the 20-day moving average, is now effectively acting as resistance and is right at $60,680. With an RSI of 45 and a fear and greed index of 32, the market is definitely in a state of fear.
Bitcoin’s illiquid supply has reached an all-time high, meaning long-term holders are no longer selling anything out of their bags. The institutions continue to buy bitcoin. On the one hand, where private investors and traders are panicking, the whales are taking full advantage of these opportunities.
External factors putting pressure on Bitcoin
Bitcoin’s decline isn’t just due to charts and trends. She is also feeling the pressure of the strong U.S. dollar and confusion about what the Federal Reserve will do next with interest rates. Although the Fed cut rates by 50 basis points last month, it has not promised to do so again anytime soon. This has made the market nervous, especially as strong US jobs data has reduced the chances of another major rate cut in November.
Moreover, inflation in the US was higher than expected. In September, the consumer price index (CPI) rose 0.2%, slightly more than the 0.1% that experts had predicted. The Core CPI, which excludes food and energy prices, rose 0.3%, again exceeding expectations. This combination of economic data has created more uncertainty in the market.
Whale activity and market panic
What has really shaken the market is some of the things happening with whales and the US government. Whales show no signs of Bitcoin rising. There is a dense cluster of short positions just above the current price, especially around $61,600. These shorts suggest that whales expect the price to fall even further, possibly to around $57,800.
Adding to the panic, the US government is now selling $4 billion worth of Bitcoin seized in the Silk Road case. This massive sell-off has left investors in an uproar and further contributed to the market’s downward trend.
What’s next?
The crypto market is currently facing a mix of fear, uncertainty and whale-induced pressure. Bitcoin’s next moves could determine whether the decline continues or reaches a new support level. Traders and investors should brace for more volatility in the coming days as these factors play out.
Credit : coinpedia.org
