Bitcoin Faces Increasing Downside Risks as Market Conditions Change
Estimated Reading Time: 3 minutes
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more
On Friday, Bitcoin had a strong bounce, jumping almost 4% after positive comments at the Jackson Hole symposium gave investors hope. However, this brief rally quickly faded, and Bitcoin dropped again over the weekend. This shows that the coin’s price is unstable and that there are growing risks in the market.
Several factors, including the selling pressure from holders and BTC’s seasonal weaker performance in the next few months are expected to affect its price. As it stands, this suggests that Bitcoin might struggle to keep rising and could face a possible decline.
Widespread Selling Pressure Could Lead to Lower Prices
Data from Glassnode shows that Bitcoin holders are starting to sell more of their coins. The group holding between 10 and 100 BTC is leading the selling trend after Bitcoin’s price reached above $118,000. However, smaller holders (0–1 BTC) and those with 1–10 BTC are still buying; larger holders with more than 1,000 BTC feel the urge to actively sell.
To this end, this wide-scale selling condition could make it harder for Bitcoin to rise further and might push its price lower if this continues.
Bitcoin Seasonal Weakness and ETF Excitement Fading
At the moment, Bitcoin also faces risks from its typical price behavior during certain months. Historically, Bitcoin tends to drop from August to September, partly because of a period known as “ghost month” in Asia, when trading slows down and traders take profits. Data shows that Bitcoin has dropped by an average of 21.7% during this time since 2017, with even much bigger drops in some years.
Source: Tradingview
From another side of the story, excitement around Bitcoin’s ETF (exchange-traded fund) launch is starting to fade, and some experts believe that recent price increases were more due to a weaker US dollar than real demand for Bitcoin.
Right now, if Bitcoin cannot hold key support levels, it could face a bigger drop, especially if seasonal trends and investor excitement continue to fade. The $105,000–$100,000 range will be important for Bitcoin, and if that support breaks, prices could fall further. Investors should be careful and watch these levels closely.
In order to place winning trades with us via Bybit, you can open an account here.
