Bitcoin Faces Critical Test at $105,000 as Whale Distribution Triggers Mass Liquidations
Bitcoin's short rise after Federal Reserve Chair Jerome Powell's dovish Jackson Hole speech has completely disappeared. The leading crypto
Quick overview
- Bitcoin has dropped to seven-week lows near $109,000 after a significant liquidation event wiped out over $900 million in leveraged positions.
- A dormant whale sold 24,000 BTC, contributing to increased selling pressure across various Bitcoin holder groups.
- The $105,000 mark is now a critical support level for Bitcoin, with potential drops to the $92,000-$100,000 range if it fails to hold.
- Despite recent price declines, Bitcoin futures demand has reached record highs, indicating cautious optimism among investors.
Bitcoin’s BTC/USD short rise after Federal Reserve Chair Jerome Powell’s dovish Jackson Hole speech has completely disappeared. The leading cryptocurrency is now at seven-week lows near $109,000. The sudden change caused a huge liquidation cascade that wiped out more than $900 million in leveraged positions and affected almost 200,000 traders in only 24 hours.
The cryptocurrency has given up all of the gains it made since Powell’s speech on Friday, when he hinted at possible interest rate reduction. At $124,176 on August 14, Bitcoin reached its all-time high, but its current price is down 12%. This shows that the market is still quite unstable, even though many expect good monetary policy.
Large Holder Distribution Drives Selling Pressure
The market changed a lot when a dormant whale, who hadn’t been active for five years, sold 24,000 BTC worth almost $11 billion. According to Glassnode data that shows synchronized distribution behavior across wallet sizes, this huge distribution event happened at the same time as more selling pressure across many groups of Bitcoin holders.
Onchain analyst Boris Vest said, “The synchronized behavior across wallet sizes shows uniform sell-side pressure.” He also pointed out that wallets with 10 to 100 BTC have become net sellers after Bitcoin crossed $118,000. At the same time, people who own 100–1,000 BTC are still split between buying more and selling around the important $105,000 mark.
BTC/USD Technical Analysis Points to Critical Support Zone
Bitcoin’s creation of a bearish weekly engulfing candle after Friday’s 3.91% rise could mean that it is vulnerable to going down. The $105,000 mark is now Bitcoin’s “last stronghold” before bigger drops, and realized price data shows a hazardous gap in cost basis support.
Recent holdings (1–3 months) have a realized price of $111,900, whereas longer-term investors (6–12 months) have cost bases between $89,200 and $91,630. This big difference means that if $105,000 doesn’t hold, Bitcoin might see a lot of selling happen quickly toward the $92,000-$100,000 range, where there is more support.
BTC Futures Market Shows Resilience Despite Price Weakness
Bitcoin futures demand has reached record highs, even if the price has gone down recently. On Monday, open interest hit an all-time high of 762,700 BTC, which is $85 billion in leveraged exposure. This is a 13% rise from two weeks ago. The futures premium, on the other hand, stays at 8%, which means that people are cautiously optimistic rather than overly exuberant.
The options market shows that people are still negative, with put options selling 10% more than calls. This skew shows that investors are getting ready for further losses, but this kind of pessimism often signals that Bitcoin’s tumultuous cycles are about to hit a bottom.
Seasonal Headwinds and ETF Fatigue Create Additional Pressure
Bitcoin’s present slump fits with past seasonal tendencies, especially during Asia’s “ghost month” (August 23 to September 21). Bitcoin has lost an average of 21.7% during this time from 2017, with big dips of 39.8% in 2017 and 23% in 2021.
Also, spot Bitcoin ETF flows have turned negative, with $1.2 billion in net outflows between August 15 and 22. This institutional withdrawal, together with worries about structural issues with USD-denominated gains instead of organic demand, suggests that the excitement after the ETF debut may be fading.
Bitcoin Price Prediction and Outlook
Bitcoin looks like it could go down even further in the near future based on technical analysis and on-chain indicators. The main battle right now is around the $105,000 support level. If it breaks below this level, it might start a chain reaction that leads to $92,000-$100,000.
However, the record high open interest in futures and growing pessimistic sentiment could actually help a rebound if enough liquidation gets rid of overleveraged positions. The $13.8 billion monthly options expiration on Friday could be a reason for the market to move, especially if spot ETF inflows start up again.
Bitcoin will probably need a lot of institutional buying through ETFs and stable whale distribution patterns to get back on track near $120,000. Until then, traders should get ready for more ups and downs in the $105,000–$115,000 region. The risks of the price going down to $100,000 will stay high until September, which is usually a bad time of year for prices.
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