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Key Insights:

  • Bitcoin’s price falls below $26,000, not seen since June, after SpaceX’s sell-off.
  • CryptoQuant data shows increased short positions and decreased demand, signaling further decline.
  • Despite the bearish sentiment, a rebound is possible, with recovery potentially starting at $23.5k – $24k.

Bitcoin has sustained its downward trend, breaking free from its previous range channel between $29,000 and $30,000. Bitcoin fell by 7.5% within 24 hours of reaching $26,448.59 at the time of writing. In this decline, Bitcoin touched below $26,000, a price not witnessed since June. This drop could confirm a double-top pattern, potentially leading to losses under $20,000 before a substantial rebound.

The recent downturn follows reports of aerospace behemoth SpaceX selling approximately $373 million of Bitcoin, acquired between 2021 and 2022. Amid this sell-off, Bitcoin now encounters resistance at $28,943.90 and has established new support at $25,409.11.

Both micro and on-chain indicators sign a continued decline in Bitcoin’s price, with a possible descent to or even below $20,000. Crypto analytics platform CryptoQuant, in their recent BTC market outlook, noted that the open interest in the futures market had been accumulating short positions since mid-July. This trend continued even as prices dipped from $32,000.

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BTC price open interest

BTC open interest, (Source: CryptoQuant)

Additionally, the Federal Reserve’s firm stance on inflation has decreased Bitcoin demand in the US. CryptoQuant noted that the sell-off was preceded by a period of low demand, resulting in a negative Coinbase premium. On-chain data also revealed that large BTC holders, known as “whales,” increased their spending activity before and during the sell-off. However, this uptick in whale spending was not enough to reverse the market trend.

Bitcoin Coinbase premium

BTC Coinbase Premium Index, (Source: CryptoQuant)

Long-Term Holders May Remain Unchanged

Despite the current bearish market sentiment, long-term BTC holders may choose to keep their positions. The Spent Output Value Bands indicate that increased whale spending has historically led to price surges. However, the sentiment in Bitcoin markets remains negative, with losses likely to extend below $25,000 over the weekend. Traders appear more inclined to short BTC rather than anticipate an immediate recovery.

Bitcoin price plunges below to $28k

BTC/USD daily chart | Tradingview

Recovery Remains a Possibility

Despite the bearish outlook, a rebound remains a possibility. Renowned traders like @DrProfitCrypto suggest a recovery could commence in the $23.5k – $24k range. Long positions entered in this region would target profit as Bitcoin recovers between $30,000 and $31,000.

In conclusion, Bitcoin’s price decline continues, with indicators suggesting further losses. The breakout from its range channel and the accumulation of short positions indicates a bearish trend. However, long-term holders may remain unchanged, and a rebound is still possible. Investors should closely monitor support levels and market indicators to make informed decisions.

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Tom Blitzer

By Tom Blitzer

Tom Blitzer is an accomplished journalist with years of experience in news reporting and analysis. He has a talent for uncovering the key elements of a story and delivering them in a clear and concise manner. His articles are insightful, informative, and engaging, providing readers with a nuanced understanding of complex issues. Tom's dedication to his craft and commitment to accuracy have made him a respected voice in the world of journalism.