Key Points
- Bitcoin’s recent fall from the $69k-$70k resistance zone has resulted in a bearish market structure.
- Despite this, the decrease in long-term holder active sales and increase in whale holdings could signal market confidence.
Bitcoin [BTC] experienced a swift decline from its resistance zone between $69k-$70k. The weekly timeframe showed a bearish structure, further exacerbated by the FOMC meeting which dispelled bullish hopes for a Fed rate cut in September.
The emergence of the Sahm Rule, indicating potential economic weakness and a possible recession, triggered panic in the markets and a further drop in BTC.
Long-term Holder Sell Pressure Decreases
The $60k region is a significant support zone, but there’s no guarantee that it will hold. On-chain metrics were closely examined to understand the sentiment of long-term holders.
Crypto-analyst Axel Adler noted a reduction in active sales by long-term holders. Compared to early June, the selling pressure from this group was described as “minimal”.
The long-term supply also saw a significant decrease. This suggested intense profit-taking activity when BTC was trading around the $68k-$70k levels, indicating a lack of confidence in a breakout past $70k.
However, this could also be seen as positive news since it implies that selling pressure might be exhausted.
Whale Cohort’s Behavior
Interestingly, the percentage of wallets holding between 100k-1M BTC increased. The last time such a significant increase was observed was in May 2023, when Bitcoin began to rise above the $26k resistance.
Despite this encouraging accumulation by large whales, other whale cohorts have been selling. The 1k-100k division saw a sharp drop in their holdings over the past two weeks, indicating selling pressure from these whales.
Bearish sentiment over the past few months was also evident in the adjusted SOPR, which showed that coins were sold at a profit on average.
Despite the drop in long-term holder active sales and the accumulation from larger whales, Bitcoin might struggle to recover in August due to the prevailing bearish sentiment in the market.
