Important points
- The market structure is weakening, showing a clear bearish pattern across cryptocurrencies.
- When whale wallets put selling pressure on the market, supply increases.
- The Federal Reserve’s hawkish attitude and slow rate cuts create unfavorable macroeconomic conditions for Bitcoin.
- Michael Saylor and MicroStrategy are under siege amid the Bitcoin price crash.
Reports from FlowDesk, QCP, and Deribit indicate a bearish pattern across the market. This is especially true in the case of Bitcoin. Older wallets are under sustained selling pressure, indicating that previous long-term holders are exiting the market.
This market exit causes an increase in the supply of assets. The Fed’s decision to take a more hawkish tone has further exacerbated this effect, with prices finding it difficult to maintain support levels and certainly failing to break through key resistance points.
Bitcoin bear market continues
Changes in global interest rates and increased asset supply caused Bitcoin prices to plummet below $85,500. A drop of more than 20% in a month and a price drop of more than 7% in 24 hours, all of which indicate that Bitcoin is in crisis. This is in contrast to the stock’s rise over the past few days.
Whale wallets, which have been inactive for years, have been opened and Bitcoin is flowing into the market. This causes supply to surge and there is not enough demand to offset the impact on prices.
Market liquidity has been severely affected as major fund managers have been on the defensive, locking in profits without reinvesting them for the future. There is such strong selling pressure, buyback Bitcoin’s fate in the coming days seems to be controlled by the bears as the price recovers.
This price weakness is due to Spot ETF The same goes for the products. The continuation of the decline is once again reinforcing as major institutional investors brace for an even longer downtrend. As evidence of this, Flowdesk, a digital asset trading and technology company, pointed to open PUT option orders being placed at rates far below the current market price.
The same trend was reflected in the options market, with the $85,000 level for PUT options outpacing the $140,000 level for CALL options in investor demand. Multiple industry data at this level indicates that Bitcoin could reach further lows this year.
Michael Saylor and the pressures of MicroStrategy
MicroStrategy, co-founded by Michael Saylor, has most of its reserves backed by Bitcoin. Bitcoin veteran Michael Saylor has been widely criticized for his business model, which bases his company’s stock price on Bitcoin.
Most recently, amidst the chaotic sell-off in the Bitcoin market, Peter Brandt, a prominent veteran commodity trader, has been shouting at Mr. Saylor, calling on the U.S. government to liquidate Mr. Saylor’s positions and acquire Bitcoin at a much lower price to use as a strategic reserve.
Once BTC reaches the low of $74,430, it will reach the average break-even point for MSTR. According to JPMorgan, this is a worrying situation as it could trigger MicroStrategy’s delisting from the MSCI index. According to industry experts and analysts, such multi-billion dollar liquidity losses will further collapse the crypto market.
Interest rate cuts will be delayed due to inflation
Thursday’s report noted that persistent inflation in the U.S. market is having a serious impact on Bitcoin’s price. The price decreased by about 7.32% to $85,700. Hopes for Bitcoin’s rally soon were dashed by the Federal Reserve’s delay in cutting interest rates, as overall market sentiment leans toward extreme fear.
The higher-than-expected U.S. employment rate is causing delays in the Federal Reserve’s push to cut interest rates. Add to that thin liquidity and profit-taking, and Vincent Liu, chief investment officer at Cronos Research, predicts that Bitcoin’s rebound will require more force than a Federal Reserve rate cut.
conclusion
The overall outlook for Bitcoin is bleak, as supply pressures, weak liquidity, and delayed expectations for interest rate cuts continue to destabilize the market. Compounding this dire situation, Bitcoin is losing major institutional support during this crisis.
Without macro factors and strong market sentiment supporting Bitcoin’s situation, the price could suffer further damage as 2025 draws to a close.
Also read: XRP Price Prediction: Will XRP crash below $2, will it recover, and how high will it rise in 2025?
