Bitcoin on Shaky Ground: Will the Crypto Giant Plummet Below $50K
- According to recent market analysis, the price of Bitcoin (BTC) may experience a significant drop below the psychological support level of $50,000, potentially leading to
- Large investors, also known as whales, can contribute to the downward pressure by selling Bitcoin to realize profits.
- On-chain analytics firm Lookonchain reported that 402,000 BTC (around $21 billion) were purchased at an average price between $51,113 and $54,303.
Bitcoin Price May Fall Below $50,000 Amid Selling Pressure
According to recent market analysis, the price of Bitcoin (BTC) may experience a significant drop below the psychological support level of $50,000, potentially leading to additional downward pressure throughout September. Historically, September has been a period of continued bear markets.
Large investors, also known as whales, can contribute to the downward pressure by selling Bitcoin to realize profits. A recent example is a whale address that sold 100 BTC (approximately $5.3 million) for a profit of $206,000.
On-chain analytics firm Lookonchain reported that 402,000 BTC (around $21 billion) were purchased at an average price between $51,113 and $54,303. These addresses are likely to sell at break-even, adding to the selling pressure.
Arthur Hayes, former CEO of BitMEX, has warned that Bitcoin could drop below $50,000. Hayes stated, “BTC is heavy. I’m shorting this weekend, targeting below $50,000.”
On September 7, the Bitcoin price lost the $55,000 support level and fell to $54,340. The weekly chart showed a decline of about 8%.
Bitfinex analysts cautioned that a “sub-$50,000 correction could occur before a true bull market.” Additionally, Galaxy Digital deposited $78.5 million worth of Bitcoin into Coinbase Prime on September 7, raising concerns about additional selling pressure.
The Federal Reserve’s September 18 interest rate cut decision may also impact Bitcoin’s price. Alvin Kan, chief operating officer of Bitget Wallet, predicts that “Bitcoin and stocks will face downward pressure until the rate cut announcement.”
Alvin Kan also stated that ”given the current market volatility, there is a possibility that Bitcoin could experience a temporary liquidity issue leading to a sharp price drop.” He added that there is about a 40% chance that Bitcoin will drop below $50,000.
According to CME FedWatch, there is currently a 70% chance of a 25bp rate cut and a 30% chance of a 50bp rate cut.