Bulls and bears are vying for control as market sentiment shows signs of balance, while Bitcoin price dips to $113,000. Experts recommend monitoring the potential for further declines to the support level of $112,000.

The release of the FOMC meeting minutes this week could shape the market's direction. Fed Chair Jerome Powell is likely to maintain a hawkish stance on rate cuts this year.

Short-term Bitcoin holders are incurring losses

Short-term Bitcoin holders (STH) were ultimately forced to sell at a loss in January this year, marking the deepest correction in this cycle. Since then, the cryptocurrency market has seen significant recovery, with 99% of holders achieving profits as BTC prices continue to reach historical highs 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 ratio has dropped below 1, indicating that short-term holders are incurring losses once again.

This signals two potential scenarios for BTC prices in the coming months: one is that bullish momentum may weaken due to significant profit-taking, or two is the elimination of weak investors to pave the way for strong bullish investors.

Outflows from physical Bitcoin ETF funds

Physical Bitcoin ETF funds saw 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 Ark 21Shares Bitcoin ETF (ARKB) saw $65.7 million sold. In contrast, Bitwise Bitcoin ETF (BITB) recorded inflows of $12.7 million.

Outflows from physical Bitcoin ETF funds continue to confirm negative sentiment among investors in the U.S. While the Coinbase Premium remains positive, the number of profit-taking investors has increased by nearly 5.4%, from 1.73 million to 1.83 million BTC. This is the largest increase since the beginning of the year, according to data from Glassnode.

BTC supply indicates a strong profit-taking phase | Source: Glassnode

Some investors believe this is the 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% in the past 5 days.

Investors are awaiting the release of the FOMC meeting minutes: BTC price increase forecast

Matrixport has 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 critical factor, with investors paying attention to the release of the FOMC meeting minutes for signs of 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 nearly an 83% chance of a 25 basis point cut by the Fed in September. Additionally, traders now foresee the possibility of two rate cuts this year instead of three, after the recent surge in the PPI index.

Identifying the target price reduction potential of the Fed | Source: CME Group's FedWatch tool

Notably, a survey by Bitcoin stock-to-flow model founder, PlanB, shows a high likelihood that Bitcoin will drop below $100,000.

Cryptocurrency analysts, including Rekt Capital, predict a price drop for Bitcoin similar to the 29% decline in 2017 and 25% in 2021. However, he anticipates that this decline will be milder 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% in the past 24 hours.

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