Bitcoin (BTC) is facing increasing downward pressure as it struggles to maintain its recent momentum above $50,000. The cryptocurrency market may see a significant correction this weekend, with whales and institutions eyeing profit-taking opportunities, adding to September’s historically bearish reputation.
Whale Activity Signals Potential Drop
Bitcoin’s price, hovering around $54,340 as of Sept. 7, is down nearly 8% for the week, with more selling pressure expected. Notably, whales—entities holding large amounts of BTC—are making moves that could impact market sentiment. A notable transaction involved a savvy whale selling 100 BTC, worth over $5.3 million, netting a profit of $206,000.
On-chain data from Lookonchain reveals that addresses holding 402,000 BTC, valued at over $21 billion, are likely preparing to sell at break-even points. This surge in selling activity could push Bitcoin below the crucial $50,000 psychological mark, a threshold that many traders are closely monitoring.
Arthur Hayes Warns of Impending Correction
Former BitMEX CEO Arthur Hayes warned of a possible correction under $50,000. In a Sept. 6 post on X (formerly Twitter), Hayes predicted that the upcoming weekend could see a significant downturn as traders follow whale selling patterns, which often dictate short-term price movements.
Bitcoin has already lost its key support at $55,000, slipping 1.4% in the 24 hours leading up to Sept. 7. Bitfinex analysts echoed Hayes’ concerns, suggesting that Bitcoin might need to dip below $50,000 before staging a more robust rally.
Adding fuel to the bearish fire, Galaxy Digital deposited $78.5 million worth of BTC to Coinbase Prime on Sept. 7, further raising concerns about incoming selling pressure.
Interest Rate Decision Looms
Amidst the market volatility, attention is also shifting to the U.S. Federal Reserve’s upcoming interest rate decision on Sept. 18. According to the CME FedWatch tool, there’s a 70% chance of a 25 basis-point rate cut, with the remaining 30% favoring a larger 50 basis-point reduction.
Alvin Kan, COO of Bitget Wallet, highlighted that Bitcoin is likely to experience more downside pressure as the interest rate decision approaches. Although a rate cut could boost investor confidence in risk-on assets like Bitcoin, the market may face a temporary sell-off as whales and institutions position themselves ahead of the announcement.
Also Read: Litecoin (LTC) Climbs 3% Amid Bitcoin’s $57K Drop – Is LTC The New Safe Haven?
Historically, September has been a challenging month for Bitcoin. Combined with whale profit-taking and looming macroeconomic uncertainty, BTC’s current trajectory points to further downside risk. However, some analysts remain optimistic that once this correction phase ends, Bitcoin could resume its upward trend later this year, especially if the Federal Reserve signals a more dovish stance on interest rates.
As Bitcoin teeters on the edge of the $50,000 mark, traders and investors are bracing for a potential correction. Whale activity, institutional movements, and the U.S. interest rate decision are all factors that could drive Bitcoin’s price lower in the short term. With September shaping up to be a volatile month, the next few days will be crucial in determining whether Bitcoin can bounce back or face further downward pressure.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
