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Bitcoin Price Decline Continues as Institutions and Holders Rebalance
Bitcoin's Recent Decline:
- Bitcoin experienced a significant decline from its October all-time high of $126,000, erasing previous gains.
- The downturn is attributed to multiple interconnected factors rather than a single cause.
Factors Contributing to the Decline:
- The rise from $40,000 to $126,000 was driven by expectations of Federal Reserve easing and institutional participation via spot ETFs.
- Reversal in Federal Reserve policies led to a collapse in these assumptions, with expectations for December rate cuts dropping significantly.
- Institutional outflows exceeded $1.1 billion as portfolio managers adjusted their positions.
- Long-term holders began selling aggressively, unloading approximately 815,000 Bitcoin in 30 days.
Potential Further Decline:
- The ongoing decline may continue as institutions rebalance away from risk, and long-term holders wait for lower prices.
- Analyst Tracy Shuchart suggests that Bitcoin could fall to $80,000 if new demand does not emerge.
Current Market Conditions:
- Bitcoin is currently trading above $90,000 but briefly slipped below this level, indicating potential testing of support near $80,000.
- For stabilization, leverage must be reduced, long-term holders need to accumulate again, and real capital should find the price appealing.
