Bitcoin’s price has been struggling this month, with analysts suggesting the June dip might not be over. The BTC price faces significant downward pressure, trading around $64,000 amid unfavorable market conditions. Concerns about dumb money selloffs are rising, which could push Bitcoin even lower.
Dumb Money Vs. BTC
Data from IntoTheBlock shows that around 5.45 million addresses have accumulated 3.03 million BTC in the $64,300 to $70,800 range. This high concentration of Bitcoin at elevated prices forms a significant supply barrier. If prices continue to drop, these holders, often referred to as dumb money, might sell to limit their losses, intensifying downward pressure.
Dumb money refers to less informed retail investors who often act emotionally, especially during downturns. This trend was noted when Bitcoin’s price fell below $67,000, leading to panic selling.
Dormant Wallets Become Active
This week, dormant Bitcoin wallets have shown increased activity. As Bitcoin dipped below $65,000, a single wallet moved 25,000 BTC in six transactions, adding to market anxiety. Data suggests these BTC, aged between 3 to 5 years, might be gearing up for a selloff as market sentiment worsens.
Market Pressures and Predictions
Over the past month, Bitcoin has fallen by 10%, while altcoins dropped by 20-30%. Additionally, 104,000 BTC options worth $6.72 billion are set to expire on June 28, 2024. With a put-call ratio of 0.52 and a max pain point at $57,000, Bitcoin is expected to face ongoing selling pressure.
Upcoming Economic Data and Its Impact
Traders are also watching the U.S. GDP growth rate data and the Fed’s preferred inflation data, the PCE inflation data, due on Thursday and Friday, respectively. These releases coincide with the BTC options expiry, potentially increasing volatility and pushing prices below $60,000, possibly even to $57,000.
Moreover, substantial Bitcoin ETF outflows, exceeding $500 million in the past week, and large BTC movements by the German government to exchanges have increased market supply.
Future Outlook
Despite the selloff, over 87% of Bitcoin holders remain in profit, indicating room for further profit-booking, which could drive prices lower. Analysts believe Bitcoin price consolidation may continue until the end of summer 2024, with a potential bull run around September, coinciding with the U.S. elections.
Positive Signs Amidst the Decline
One positive indicator is the reduction in Bitcoin exchange balances. In the last 30 days, over 107,000 BTC have exited crypto exchanges, potentially leading to a supply crunch. The recent Bitcoin halving also reduced block rewards, helping to control new BTC creation and keep supply in check.
Analysts’ Perspectives
Earlier this month, the Federal Reserve’s hawkish stance on rate cuts led to a selloff, with over $4 billion worth of Bitcoin sold by whales and miners. However, if the Fed cuts rates, some analysts believe BTC could reach $100,000 by the end of the year.
Popular crypto analyst Rekt Capital recently noted, “Strong rejection from this Lower High resistance yesterday to precede extra downside today. Bitcoin isn’t ready to end its June downtrend just yet. But this is still the downtrend line to watch for a break once Bitcoin is ready to reverse to the upside.” His analysis suggests further short-term downtrends for BTC.
