Key Points:
Bitcoin long-term holders have sold 400,000 BTC in the past 30 days.
Short-term holders have panic-sold $3 billion worth of BTC, resulting in losses.
The ascending wedge pattern for Bitcoin suggests a price target of $72,000, while traders indicate BTC could drop to $60,000.
BTC showed weak performance on Tuesday, with a decline of over 3.5% in the past 24 hours, trading at $104,000. This brings the weekly and 30-day declines to 8% and 17%, respectively.
This round of correction is accompanied by massive sell-offs from long-term holders, who have sold over 400,000 BTC in the past month.
Long-term holders (LTHs), defined as investors who have held BTC for at least six months without selling, began to significantly reduce their holdings after BTC's price broke the historical high of $126,000 in early October.
CryptoQuant analyst Maartunn noted that the net supply of long-term holders has decreased by 405,000 BTC on a rolling 30-day basis, valued at approximately $42.3 billion based on Tuesday's current market price.
Crypto market commentator TFTC responded to Maartunn's analysis, stating that this represents "almost 2% of the total supply," and added:
TFTC founder Marty Bent pointed out, "The market has been able to absorb such a large amount of selling pressure without crashing 30%-50%," which is a positive signal for BTC.
However, short-term holders are also under significant pressure, having transferred over 26,800 BTC (worth about $3 billion) to exchanges at a loss in the past three days.
🚨 Short Term Holder Capitulation 28,600 BTC ($2.98B) is sent to exchanges at a loss by STH. pic.twitter.com/zLmfE0lzhp
This activity highlights a typical market behavior pattern, where STHs (often referred to as "weak hands") tend to panic-sell during market downturns, frequently leading to investment losses.
As reported by Cointelegraph, short-term holders are currently facing expanding unrealized losses, and if the downtrend continues, they may continue to sell.
The weekly chart shows that after losing support from the trendline at $114,550, the BTC/USD pair is validating a descending wedge pattern.
Bulls are currently struggling to maintain the price above the 50-week simple moving average (SMA), which is currently at $103,300.
Other key defensive levels include the psychological level of $100,000 and the 100-week SMA at $82,000.
If the weekly close falls below this area, it will open the path for BTC to drop to the wedge target of $72,000, indicating a 30% decline from the current price.
The bearish trend for BTC is signaled by the widening divergence between its price and the relative strength index (RSI).
As shown in the weekly chart above, the BTC/USD pair rose from mid-July to early October, forming higher lows. However, during the same period, its weekly RSI dropped from 70 to 45, leading to the formation of lower lows.
The divergence between rising prices and falling RSI typically indicates weakness in the current uptrend, prompting traders to increase selling at local highs as profit-taking intensifies and buying momentum wanes.
Technical analyst JDK Analysis used a power law model, inviting veteran trader Peter Brandt to assess potential bottom areas for Bitcoin's price decline.
Brandt noted that BTC could bottom out around $60,000, which is "above the green band" in the model, and added:
Cointelegraph reported that as Bitcoin fell below $104,000, cryptocurrency market sentiment has dropped into the "extreme fear" zone, with the indicator falling to 21, and expectations for BTC's price to drop below $100,000 are growing louder.
Related: The crypto whale that accurately predicted the October crash opens a $55 million long position in Bitcoin (BTC) and Ethereum (ETH).
This article does not constitute any investment advice or recommendation. All investment and trading activities carry risks, and readers should conduct their own research before making decisions.
Original article: “Bitcoin Long-Term Holders Offload 400K BTC: How Low Can BTC Price Go?”
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