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Bitcoin Price Drops Below $90,000: What’s Next for Investors?
Bitcoin’s price has dropped below the $90,000 support level for the first time in over three months, generating a negative sentiment among traders. The Crypto Fear & Greed Index has shifted from “neutral” and “greed” to “fearful” for the first time in nearly six months. Amidst this price correction, institutional investors have started to lose interest in Bitcoin, raising concerns among traders.
Bitcoin Supply on Exchanges Grows While Whales Dump BTC
On-chain data shows that the supply of Bitcoin on exchanges is climbing, while supply outside of exchanges, held by whale wallets, is declining. This typically indicates that entities holding BTC outside of exchanges are transferring their holdings to exchange wallets after weeks of consistent accumulation. A decline in non-exchange holdings is considered an expectation of further decline in Bitcoin’s price.
A key metric, BTC supply held by funds, is in decline, which can be interpreted as a drop in Bitcoin holdings by institutions. This is consistent with spot Bitcoin net negative flows observed by Farside Investors.
Institutional Investors Lose Interest in Bitcoin: Should You Be Worried?
Fund flow data from CoinShares shows that institutions have pulled $595 million from Bitcoin funds month-to-date. Week-to-date, a total of $571 million has been pulled from Bitcoin funds, while Ethereum, Solana, XRP, and multi-asset funds see inflows. Net week flows in crypto are dragged down by the outflows in Bitcoin-based funds.
CoinShares’ data suggests that institutional investors are losing interest in Bitcoin, which could be a concern for traders. However, it’s essential to note that this trend may not necessarily mean that the BTC bull run is over.
Are Whales Dumping Bitcoin?
On-chain analysis shows a decline in whale transactions in two segments, valued at $100,000 or more, and $1 million and higher. The downward trend in the transaction count of these two segments started on February 3. Whales are shedding their BTC holdings while taking profits, which can increase selling pressure on the token and have a negative impact on price.
The Next Big Bitcoin Trade
Bitcoin’s price has slipped under key support at the $90,000 level, and technical indicators suggest further correction in Bitcoin’s price. Three key support levels that BTC could bounce from are $85,072, $81,500, and $76,900. These three support levels coincide with the upper/lower boundaries of fair value gaps on the BTC/USDT daily price chart.
Markus Thielen of 10xResearch presents his technical perspective on Bitcoin’s price, explaining that from a technical analysis perspective, Bitcoin appears to be trading within an Ascending Broadening Wedge pattern. Thielen’s three key observations are the widening price action, a wedge-like shape that has emerged in Bitcoin’s price chart, and a partial rise that suggests correction is impending.
Expert Commentary on Where Bitcoin is Headed Next
Ilman Shazhaev, Founder & CEO of Dizzaract, discussed the impact of the Bybit hack on Bitcoin’s price. Shazhaev believes that the unity in the market has further placed the broader industry in a positive light, thus showing that the current price action will likely not last for long.
Dr. Sean Dawson, Head of Research at Derive.xyz, commented on the bearish shift as institutional funds exit their positions in Bitcoin. Dawson believes that the chance of BTC settling above $100K by the end of March 28 has fallen to 30%, down from 39% just 24 hours ago.
Traders on the decentralized options platform have reacted to recent developments by adjusting their positions with a slight increase in BTC 7-day at-the-money implied volatility (ATM IV), now sitting at 46%. This reflects a heightened market uncertainty in Bitcoin’s price.
As the market continues to evolve, it’s essential for investors to stay informed and adapt to changing trends. Stay up-to-date with the latest news and analysis on Global Crypto News.
