Bitcoin’s correction below $50k remains in play as whales look to sell BTC
A Bitcoin correction below $50,000 could happen as soon as this weekend, which threatens to put further downward pressure on September, which is historically a bearish month.
Bitcoin (BTC) price may see further downward pressure this weekend as whales (those holding large amounts of BTC) look to lock in profits.
A savvy WELL address sold over $5.3 million worth of 100 BTC for a profit of over $206,000.
Subsequently, a total of 402,000 BTC worth more than $21 billion was bought by addresses looking to sell during the holiday, according to a September 7 X post by onchain intelligence firm Lookonchain:
“836,000 addresses bought ~402,800$BTC ($21B) at a price between $51,113 and $54,303. These addresses can be sold near the break.”
Money in/out around the price. Source: Lookonchain
Whales can have a significant impact on the price action of cryptocurrencies due to the large amount of capital that moves in the market. Traders often follow whale selling patterns to find signals in the short-term price sweep of cryptocurrencies.
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Bitcoin may correct below $50,000 – Arthur Hayes
Bitcoin could see a correction below the key $50,000 psychological mark as soon as this weekend, warned Arthur Hayes, former CEO of crypto exchange BitMEX.
Hayes wrote in a September 6 X post:
“BTC is tough, I'm shooting for under $50k this weekend. I took a cheeky short. Pray for my soul: for I am a wretch.
Meanwhile, Bitcoin price has lost its key $55,000 support, falling 1.4% to trade at $54,340 in 24 hours at 9:26 am UTC September 7. The world's first cryptocurrency is down nearly 8% on the weekly chart.
BTC/USD, 1-day chart. Source: Cointelegraph
Bitfinex analysts have warned that it could correct below $50,000 before a real bull rally. Analysts told Cointelegraph:
“It's not an arbitrary number, but the percentage return cycle highs decrease by 60%-70% each cycle, and the average bull market correction decreases as well.”
Adding to investors' fears of further selling pressures, Galaxy Digital submitted $78.5 million worth of BTC to Coinbase Prime on September 7, according to Lookonchain.
Galaxy Digital Bitcoin Deposit to Coinbase Prime. Source: Lookonchain
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Bitcoin to see further downward pressure leading to lower interest rates
A potential interest rate cut in the world's largest economy, the United States, could strengthen investor sentiment for riskier assets like Bitcoin.
However, according to Alvin Kahn, CEO of Bitgate Wallet, Bitcoin's price may see more negative pressure until the September 18 interest rate decision. Khan told Cointelegraph:
“We expect BTC and equity markets to remain bearish until the Fed's official rate cut announcement. Once the rate cut is confirmed after the September FOMC meeting, we see risk assets rising in the short to medium term.”
Whale and institutional buying activity can have a significant impact on the short-term price of Bitcoin. Khan added:
“Given the current market volatility, there is a possibility that BTC will experience liquidity problems, which could cause a sharp temporary price decline. Currently, there is a 40% chance that BTC will dip below $50,000.
Investors are awaiting an interest rate cut from the US Federal Reserve at its next meeting on September 18.
Chances of an interest rate cut. Source: CME FedWatch
According to the latest data from CME's FedWatch tool, the odds of a 25 basis-point rate cut are currently at 70%, while the odds of a 50 basis-point rate cut are at 30%.
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