Short-term investors are panic selling, and Bitcoin has lost key support.
Recently, the price of Bitcoin ($BTC) fell to $112,000, attracting widespread attention in the market. According to CryptoQuant data, short-term holders have been selling off in large quantities over the past week, resulting in over 20,000 Bitcoins flowing into exchanges at a loss.
Analyst JA Maartun pointed out on X: "Short-term holders are selling Bitcoin at the deepest losses in the past month. If a quick rebound does not occur, it may repeat the long-term loss selling pattern seen between February and May this year."
Source: X/@JA_Maartun JA Maartun points out: "Short-term holders are selling Bitcoin at the deepest losses in the past month."
Data shows that the price of Bitcoin dropped from $118,600 to $114,400 in just three days, a decline of 3.5%. The Spent Output Profit Ratio (SOPR) for short-term holders has also fallen below 1, indicating increased pressure on investors. Meanwhile, long-term holders are realizing profits at high levels, achieving an average cost return of 273 times, leading to a clear division in the market.
Technical indicators and market sentiment suggest future market trends.
According to technical analysis from TradingView, Bitcoin has recently formed a downward channel. Although the short-term trend is weak, the long-term trend still shows a cumulative tendency. The MACD indicator is nearing the signal line, suggesting a potential rebound opportunity, while the EMA (Exponential Moving Average) indicates that if the price breaks through the 20-day EMA, it may further return to the range of $114,800 to $116,800. As of the time of writing, the price of Bitcoin is $114,290.
Source: TradingView Bitcoin has recently formed a downward channel.
Additionally, the Crypto Fear & Greed Index has dropped to the 'Fear' zone, with a score of only 44, the lowest level since June. Market sentiment has turned pessimistic, with retail investors experiencing heightened panic. However, analysis from Santiment indicates that negative sentiment may actually provide opportunities for bottom-fishing buyers, especially when the market is 'bleeding,' as panic selling often signals the potential for a short-term rebound.
Macroeconomic factors and market dynamics are influencing Bitcoin's trend.
Macroeconomic factors are also impacting the Bitcoin market. Investors are closely watching comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole annual meeting, as the speech may reveal the direction of future interest rate policies. Recently released U.S. Consumer Price Index (CPI) data shows that inflation remains at 2.7%, higher than the Fed's 2% target, leading to a decrease in market expectations for interest rate cuts.
Further Reading
CPI lower than expected! 94% chance of a rate cut in September, will Ethereum soar past $4,600 to reclaim glory?
Moreover, outflows from Bitcoin-related ETFs (Exchange-Traded Funds) have intensified. According to data from Farside Investors, Bitcoin ETFs recorded outflows of $523 million and $95.9 million on Tuesday (8/19) and Wednesday (8/20), respectively, marking the second-highest record of this month. Ethereum ETFs also experienced an outflow of $422 million on Tuesday. Overall, over the past three days, a total of $1.35 billion has flowed out from Bitcoin and Ethereum funds, indicating a shift in market sentiment towards conservatism.
Source: Farside Investors
Can Bitcoin maintain support, becoming the key for future market trends?
The recent support level for Bitcoin is considered to be $112,000, a price range that has historically attracted significant buying interest, forming strong support. Swissblock, the Swiss cryptocurrency trading company, states: "If Bitcoin falls below the support range of $100,000 to $110,000, a significant sell-off may be required to facilitate a breakthrough." According to Polymarket's forecast, the probability of Bitcoin closing at $114,000 this week is 73%, while the probability of it falling below $112,000 is 39%.
Source: Swissblock, the Swiss cryptocurrency trading company, states: "If Bitcoin falls below the support range of $100,000 to $110,000, a significant sell-off may be required to facilitate a breakthrough."
The market currently shows a clear divergence: short-term investors are panic selling, while long-term holders are securing steady profits. The next challenge for Bitcoin is to maintain support and retest the $120,000 level. If it can successfully rebound, market confidence may recover; if support is lost, it may trigger a deeper correction. For investors, the market trends in the coming days will be a decisive moment.
'Is retail sentiment about to collapse again? Short-term investors are panic selling, and Bitcoin has dropped to $112,000.' This article was originally published in 'Crypto City.'
