Bitcoin falls below $59,000, with on-chain data painting a bearish picture
|- Bitcoin rises 2% on Monday after losing more than 10% in the past week.
- CryptoQuant's Bitcoin Coinbase Premium Index is falling, suggesting a decrease in investors' interest and activity in Coinbase.
- US spot Bitcoin ETFs registered outflows last week, and a whale wallet deposited BTC worth more than $240 million in Binance.
- Historically, September hasn’t been a good month for Bitcoin, but the fourth quarter as a whole tends to end with gains.
Bitcoin (BTC) recovers slightly on Monday after falling 11% last week and closing below $57,500, weighed by declining demand from US spot Bitcoin ETFs, which recorded $279.4 million in outflows. Additionally, a whale has deposited a large amount of BTC in Binance, and decreasing investors' interest and activity in Coinbase suggests that Bitcoin's rebound could be short-lived at the start of a month that historically hasn’t been positive for prices.
Daily digest market movers: Few signs of optimism
- CryptoQuant's Bitcoin Coinbase Premium Index, a key indicator of how large-wallet investors behave, suggests decreasing interest from whales in the top crypto. The indicator shows the gap between Coinbase Pro price (USD pair) and Binance price (USDT pair). Coinbase Premium data is one of the indicators that shows a sign of whale accumulation, as the Coinbase Pro platform is considered the gateway for institutional investors to purchase cryptocurrencies.
In the case of Bitcoin, the index fell from 0.077 to -0.004 from August 24 to September 1, trading below its 14-day Simple Moving Average (SMA) at 0.018. This indicates that whales are continuously selling at a lower premium. In addition, it shows a decrease in the interest and activeness of investors in Coinbase.
Bitcoin Coinbase Premium Index chart
- According to Lookonchain data, a whale deposited 4,164 BTC worth $243.8 million in Binance exchange from Saturday to Monday. BTC fell 3% over the weekend.
This whale deposited 4,164 $BTC($243.8M) to #Binance in the past 3 days.https://t.co/vdx96ZrFRH pic.twitter.com/N1j8LHqJ3D
— Lookonchain (@lookonchain) September 2, 2024
This whale deposited 4,164 $BTC($243.8M) to #Binance in the past 3 days.https://t.co/vdx96ZrFRH pic.twitter.com/N1j8LHqJ3D
— Lookonchain (@lookonchain) September 2, 2024
- US spot Bitcoin ETFs recorded a total net outflow of $279.4 million last week, according to Coinglass data, a sign of waning market sentiment. The combined Bitcoin reserves held by the 11 US spot Bitcoin ETFs stand at $43.62 billion.
Bitcoin Spot ETF Net Inflow data
- Coinglass's Historical Bitcoin Monthly Return (%) data shows how Bitcoin has performed in different monthly percentages. As shown in the graph below, Bitcoin generally yielded negative returns for traders in September, with an average of -4.45%. However, the fourth quarter (Q4) data has generally shown a positive trend, with an average of +88.84%. Q4 will be important for the largest cryptocurrency because the upcoming US elections in November, with favorable conditions, could propel the price of Bitcoin.
Bitcoin Monthly returns (%) chart
Bitcoin Quarterly returns (%) chart
Technical analysis: BTC closes below the support level
Bitcoin price closed below the $58,783 support level on Sunday and made a low of $57,201. On Monday, it trades slightly higher by 2% at $58,435.
If the 50% price retracement level at $59,560 (drawn from a high in late July to a low in early August) holds as resistance, Bitcoin could decline 4% from its current trading level at $58,435 to retest its daily support level at $56,000.
The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart trade below their neutral levels of 50 and zero, respectively. Both indicators suggest that neither bulls nor bears are in control.
BTC/USDT daily chart
In an upside scenario, Bitcoin's price could break above the $59,560 resistance and close above $62,042, its 61.8% Fibonacci retracement level. In that case, the bearish thesis will be invalidated, and BTC could rise by 5.5% to revisit its daily resistance level at $65,379.
Cryptocurrency prices FAQs
Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.
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