Key Insights
- Bitcoin price has slipped below $115,000 this week. This decline has been a significant worry for investors who fear Bitcoin losing heat..
- CryptoQuant’s Binance Buying Power Ratio shows that demand has weakened so far. Also, there is a higher risk of a correction.
- Despite selling pressure, however, whales and sharks continue to accumulate BTC.
Bitcoin is facing fresh pressure, especially after losing the $115,000 zone for the first time in nearly two weeks. According to data from TradingView, the BTC price has dropped by more than 6% since August 13.
This trend has raised fears that the recent bullish strength may slow down. The decline also comes despite the accumulation of Bitcoin whales and sharks who may be buying the dips.
Bitcoin Whales Show Confidence Through Accumulation
According to Santiment, wallets between 10 and 10,000 BTC have added over 20,000 coins since last week’s dip. Moreover, since March, this group has bought over 225,000 BTC in a show of strong confidence for the long-term.
While whale activity has been strong, technical and market indicators show that caution is still advised.
Binance’s Ratio Predicts a Downturn
Analyst CrazzyBlockk pointed out the Binance Buying Power Ratio as a warning signal in a recent CryptoQuant QuickTake post. For context, this metric measures stablecoin inflows against Bitcoin outflows on Binance.
When the ratio trends high, it means that buying liquidity is strong. On the other hand, when the ratio drops, it means that demand is weaker. According to CrazzyBlockk, the ratio recently hit a high of 2.01.
However, within two days, it reversed and fell straight to -0.81. This sudden decline showed that the new capital that entered the market had dried up. Shortly after, the BTC price confirmed this by correcting the price from $124,474 to a low of $114,786.
Investors in Profit Eye Profit-Taking
Another factor adding to investor jitters is Bitcoin’s Market Value to Realised Value (MVRV) ratio. The indicator shows whether Bitcoin is overvalued compared to the average cost basis of investors.
As of writing, Bitcoin’s MVRV ratio is around +21%. This means that most holders are in profit. According to Santiment, this ratio isn’t trading at extreme highs. However, it does put BTC price in a “mild danger zone” where profit-taking is more likely.
Too many investors may start looking to secure gains after the Bitcoin all-time high of 124,128 last week. If this happens, the cryptocurrency will likely trade sideways or downwards in the long term.
Analysts Expect Sideways Movement For Bitcoin Price
Bitfinex analysts believe the recent rally lost steam because the market lacked macroeconomic catalysts. BTC price has quickly pulled back after a 10% surge earlier in August, and now appears to be consolidating.
Analysts believe the market is now waiting for a clear signal before choosing a direction. One major event investors watch is the US Federal Reserve’s interest rate decision on September 17.
Many expect a rate cut, which could act as a promoter (or a hindrance) for the next move of Bitcoin.
Coinglass data shows that about $2.24B in short positions could be liquidated if Bitcoin climbs to its all-time high. In other words, this means that a short squeeze is likely if buying pressure increases suddenly.
Bitcoin Price Outlook for September
Analysts believe that several price levels are essential for Bitcoin from here. If the BTC price holds $115,787, it could target the $125,000 to $127,000 range. On the other hand, a breakout above $127,000 may open the door to $140,000.
However, Bitcoin’s immediate support sits at around $110,000 on the downside. This means that a failure to hold this level could lead to further corrections for the asset. That might even erase most of its gains in the last rally.
In all, traders will watch the Federal Reserve’s decision and exchange inflows to predict what will come next for Bitcoin.
