Bitcoin‘s price closed below the crucial support level of approximately $57,000 on Thursday, increasing the likelihood of further short-term declines. The altcoin market is also trending downward along with the largest cryptocurrency.
Current State of Bitcoin and Altcoin Markets
Bitcoin fell over 4% this week, trading at around $56,786 at the time of writing. Market sentiment remains downward as investors act cautiously and avoid new purchases until the current correction stabilizes.
The altcoin market reflects the downward trend of the largest cryptocurrency, indicating continued downward pressure in the medium term. Bitcoin’s Fear and Greed Index fell to 22% today, signaling extreme fear and potential capitulation.
Whales, who typically influence Bitcoin’s market direction, showed decreased demand for cryptocurrencies after August’s decline. This drop in interest is evident in the performance of U.S. spot Bitcoin ETFs, which saw cash outflows for seven consecutive days. On Thursday, these ETFs reported a net outflow of approximately $211 million, mainly from Fidelity’s FBTC. Only BlackRock‘s ETF IBIT managed to avoid recent outflows.
Additionally, on-chain data reveals that some whales have been moving their BTC to exchanges recently, fueling the downward trend. Meanwhile, the total BTC supply on centralized exchanges has continued to decrease over the past five months, indicating that long-term investors are unaffected by current market fluctuations.
Experts Warn of Potential Deepening Decline
Experienced analyst Peter Brandt noted that Bitcoin’s price has formed a macro megaphone formation, traditionally seen as a precursor to a major upward move. The analyst added that the downward trend currently outweighs the upward trend. Brandt also predicts that despite a potential interest rate cut in the coming weeks, Bitcoin could retest the support level around $46,000.
BitMEX co-founder Arthur Hayes similarly expressed concerns, predicting that the largest cryptocurrency’s price could fall below $50,000 before reaching new highs.
