Bulls and bears are vying for control as market sentiment shows signs of balancing, while Bitcoin's price drops to $113,000. Experts recommend monitoring the next potential drop to the support level of $112,000.
The release of the FOMC minutes this week could shape the market's direction. Fed Chair Jerome Powell is likely to maintain a hawkish stance on interest rate cuts this year.
Short-term Bitcoin Holders Taking Losses
Short-term Bitcoin holders (STHs) were last forced to sell at a loss in January of this year, marking the deepest correction in this cycle. Since then, the cryptocurrency market has largely recovered, with 99% of holders making a profit as the price of BTC continues to reach all-time highs (ATH) after surpassing the $100,000 mark.
Data from CryptoQuant on August 19 shows that short-term holders are selling at a loss for the first time since the decline in January. Notably, the STH-SOPR index has dropped below 1, indicating that short-term holders are suffering losses once again.
This signals two potential scenarios for BTC prices in the coming months: one is that bullish momentum may weaken amid significant profit-taking, or two is the elimination of weak investors to pave the way for bullish investors.
Outflow of Cash from Spot Bitcoin ETF Funds
Spot Bitcoin ETFs have seen outflows of up to $121.7 million on Monday, indicating a shift in institutional investor sentiment. BlackRock's iShares Bitcoin ETF (IBIT) recorded outflows of $68.7 million, while the Ark 21Shares Bitcoin ETF (ARKB) saw $65.7 million sold off. In contrast, Bitwise Bitcoin ETF (BITB) recorded inflows of $12.7 million.
The outflow of cash from spot Bitcoin ETF funds continues to confirm negative sentiment among investors in the United States. While Coinbase Premium remains positive, the number of investors taking profits has increased by nearly 5.4%, from 1.73 million to 1.83 million BTC. This is the largest increase year-to-date (YTD), according to data from Glassnode.
Some investors believe it is time to lock in profits and reduce bullish bets on BTC. Data from Glassnode shows that the number of holders selling at a loss has increased by more than 37.8% over the past 5 days.
Investors Await FOMC Minutes Release: BTC Price Increase Prediction
Matrixport stated that the Jackson Hole event will not have a significant impact, viewing it mainly as a discussion forum rather than a market-moving factor. The FOMC meeting on September 17 remains the most important factor, with investors paying attention to the release of the FOMC minutes for signals regarding the direction of the cryptocurrency market.
As The Coin Republic reported earlier, investors have become cautious after the U.S. PPI index rose by 0.9% in July, raising the core PPI index to 3.7%.
At the time of writing, the CME FedWatch tool indicates a nearly 83% probability of a 25 basis point Fed rate cut in September. Additionally, traders now anticipate the possibility of two rate cuts this year instead of three, following the recent hotter PPI index.
Notably, a survey by the founder of the Bitcoin stock-to-flow model, PlanB, indicates a high likelihood that Bitcoin will drop below $100,000.
Cryptocurrency analysts, including Rekt Capital, predict a Bitcoin price crash similar to the 29% drop in 2017 and the 25% drop in 2021. However, he predicts that this downturn will be shallower and quicker in this cycle compared to previous cycles.
Bitcoin is trading at $115,629 at the time of writing, with a 24-hour low and high of $114,470 and $117,050, respectively. Trading volume has decreased by 2.4% over the past 24 hours.
