Quick overview

Live BTC/USD Chart

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Bitcoin (BTC) fell below $112K during the early Asian trading session on Monday. Altcoins like Ethereum (ETH), Ripple (XRP), and Solana (SOL) also experienced declines, while meme coins faced even larger losses.

Bitcoin longs worth over $1 billion were liquidated within just 20 minutes following a sharp price drop. This significant washout was driven by low liquidity, a common occurrence during the Sunday night session.

Typically, when the US market opens, traders buy the dip. However, caution is advised, as the Bitcoin daily chart indicates it is hovering around its 50-day Exponential Moving Average (EMA), a key support level at $110,000. Further losses in Bitcoin and the broader cryptocurrency market could occur if prices fall below this support zone. Moreover, the Relative Strength Index (RSI) on the daily chart shows early bearish momentum, as it has dropped below the neutral level of 50, further affirming a bearish trend.

According to CryptoQuant data, Bitcoin displays conflicting signals on on-chain metrics, indicating uncertainty among traders. As large deposits into exchanges decrease, selling pressure on Bitcoin remains low, suggesting a potential bullish scenario. The total amount of Bitcoin entering exchanges has declined to a 7-day moving average of 25,000 BTC, among the lowest levels in over a year. This marks a significant drop from 51,000 BTC on July 17, when Bitcoin first traded around $120,000. Additionally, the average deposit amount per exchange has decreased from 1.14 BTC on July 18 to as low as 0.57 BTC so far in September, indicating reduced selling pressure.

Furthermore, as large investors position themselves ahead of the Fed’s decision, the total amount of USDT deposited into exchanges is increasing, providing the liquidity needed for a potential cryptocurrency rally.

The current market appears to be driven by retail investors rather than large wallets, suggesting it is a retail-driven environment rather than one dominated by whales, which is indicative of a bearish scenario. Inflows into wallets containing Bitcoin from 0 to 0.001 BTC totaled approximately 719,000 BTC between early September and Wednesday, while wallets holding between 0.001 and 0.01 BTC recorded roughly 97,000 BTC

Retail investors are currently propelling the market through a large number of small-volume transactions, suggesting a gradual climb towards $120,000 as this accumulation pattern unfolds. However, a sudden increase in whale activity could quickly trigger a correction and alter the market’s direction, so traders should remain cautious.