Bitcoin Price Forecast: BTC drops below $94,000, temporary dip or the start of a sell-off
Bitcoin price today:$93,800
- Bitcoin recovers slightly and trades above $93,000 after a recent pullback this week.
- US spot Bitcoin ETFs experienced a second straight day of outflow of $122.80 million on Tuesday.
- Reports highlight that BTC could undergo a re-accumulation phase before sustained price increases occur.
Bitcoin (BTC) recovers slightly and is trading above $93,000 on Wednesday after declining 6% since Monday. The recent retracement in Bitcoin’s price aligns with a second straight day of outflows from spot BTC Exchange Traded Funds (ETFs)totaling $123 million on Tuesday, suggesting a dip in institutional demand. Glassnode reports also indicates a potential re-accumulation phase before further sustained price growth.
Bitcoin pullback or the start of a sell-off
Bitcoin failed to reach the $100K milestone on Friday, leading to a 6% price pullback and falling to a low of $90,791 until Tuesday. The recent retracement could be clearly seen as a decline in institutional demand this week. According to Coinglass ETF data, US spot Bitcoin ETFs experienced an outflow of $122.80 million on Tuesday, the second straight day of outflow. If this trend persists or accelerates, it could further extend the ongoing decline in Bitcoin’s price.
Total Bitcoin Spot ETF Net Inflow chart. Source: Coinglass
Moreover, the recent surge in Bitcoin’s price has driven long-term holders to realize an unprecedented $2.02 billion in daily profits, setting a new all-time high, according to Glassnode’s weekly report. The resulting supply overhang may require a re-accumulation phase before sustained price increases occur.
BTC Long-Term Holder Realised Profit chart. Source: Glassnode
The report explains that most of this sell-side pressure appears to originate from coins aged between 6 months and 1 year, accounting for 35.3% of the total. This suggests that more tenured investors remain measured and potentially wait patiently for higher prices. These selling volumes may describe swing trade-style investors who accumulated after the ETFs launched and planned to ride only the next market wave.
BTC Profit by Age (Nov 2024) chart. Source Glassnode
Bitcoin Price Forecast: BTC projects a fall to $85,000
Bitcoin’s price reached a new all-time high (ATH) of $99,588 on Friday and then started declining. BTC declined 7%, falling to a low of $90,791 on Tuesday. At the time of writing on Wednesday, it recovered slightly, trading above $93,800.
If BTC fails to recover and the pullback continues, it could extend the decline to retest its important psychological level of $90,000. A successful close below this level would extend an additional decline to test its next support level at $85,000.
Moreover, the Relative Strength Index (RSI) indicator supports this price pullback in the daily chart. The higher high in BTC’s price formed on Friday does not reflect the RSI lower high for the same period. This development is termed a bearish divergence, often leading to a trend reversal or short-term pullback.
BTC/USDT daily chart
If BTC finds support around the $90,000 level and recovers, it could rally to reach its ATH level of $99,588.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Manish Chhetri
FXStreet
Manish Chhetri is a crypto specialist with over four years of experience in the cryptocurrency industry.
