- BTC drops 0.7%, is down 4.5% in a week; altcoins are also struggling.
- Liquidations are elevated this week as the mood turns to “Fear” at 40.
- ETF outflows of $225M and whale selling add to downside risk.
- Fed caution on rate cuts lifts USD, adding macro headwinds for BTC.
has resumed its selloff after yesterday’s rise proved to be short-lived. BTC trades 0.7% lower over the past 24 hours and is down over 4.5% across the past 7 days.
Major altcoins are also under pressure, with Ethereum falling almost 4%, taking losses across 7 days to 12%. Solana trades 3% lower over the past 24 hours, and BNB is down 2.5%. The total cryptocurrency market capitalisation has fallen 1.4% to $3.83 trillion in 24 hours.
Heavy selling pressure has triggered billions in liquidations this week, accelerating declines and fueling volatility. Total liquidations hit $1.7 billion on Monday (95% long positions), marking the largest liquidation event this year. The mood remains fragile, with sentiment analysis indicating a shift towards Fear. The Fear and Greed index has fallen to 40, Fear territory.
What’s Causing Today’s Selloff?
Large-scale liquidations, weak institutional demand, whale selling, and rising macroeconomic uncertainty are driving the losses as the and US treasury yields rise.
Demand for BTC ETFs has softened this week. According to SoSo Value data, BTC ETFs have recorded net outflows of $225.7 million so far this week, following four weeks of inflows. Should institutional demand continue to weaken, this could weigh further on BTC’s price.
Whales are also offloading BTC, keeping the price under pressure. On-chain data shows that large whale holders holding 1,000 BTC or more have sold 147k BTC since the August all-time high of 124.4k. This represents around $16.5 billion worth of Bitcoin and a 2.7% reduction in whale holdings. Sustained selling from large investors presents a headwind for BTC’s recovery.
The macro backdrop is also causing some nervousness. Federal Reserve Chair Jerome Powell adopted a cautious stance towards further in his speech on Tuesday, while also warning about relatively high valuations. Powell’s comments pulled US stocks off record highs and lifted the USD. The market is still pricing in 43 basis points of cuts this year and a 92% chance of a reduction in October. However, the market has lowered the rate cut expectation across the cycle to 100 basis points from 125 basis points.
Attention turns to US , , and , as well as a plethora of Fed speakers, for further clues on rates. Weak data and dovish Fed officials could increase rate cut expectations and boost BTC, which tends to perform better in low-interest-rate environments due to increased liquidity.
Bitcoin Technical Analysis
BTC’s recovery from 107.2k encountered resistance at 117.9k, and the price fell lower, where it continues to test the rising trendline support dating back to early April. The break below the 50 SMA, combined with the RSI below 50, keeps sellers hopeful of further losses.
Sellers need to close below 112k, the rising trendline to open the door to 110k and 107.2k. A break below 107.2k creates a lower low.
Should the trendline support hold, buyers will look to rise above the 50 SMA at 114.2k to extend gains towards 117.9k. A rise above here creates a higher high.
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