Bitcoin (BTC) Faces Challenges Despite 2.8% Gain, Short-Term Holders Exit the Market

Bitcoin [BTC] was trading at $58,200 at the time of writing after a 2.8% gain. The price increase followed the release of U.S. inflation data

Bitcoin [BTC] price was trading at $58,200, up 2.8 at the time of writing. The increase in price came after the release of US inflation data. Traders are buying into the narrative that the Federal Reserve will cut interest rates next week.

But despite these gains, Bitcoin still faced difficulties. CryptoQuant writer IT Tech stated that short-term holders are leaving the market.

In the last two weeks, this group has reduced its net position in Bitcoin, taking profits and losses.

During the same period, long-term Bitcoin holders accumulated more coins, showing a significant shift in capital.

Source: CryptoQuant

Short-term Bitcoin holders have a more immediate impact on the price and contribute to volatile price movements by selling.

However, long-term holders' accumulation could stabilize the price and set the stage for a rebound.

Bitcoin owners are coming out

The weak demand for Bitcoin is also reflected in its divergence from gold prices, which have recently reached an all-time high.

CryptoQuant head of research Julio Moreno stated that an ongoing period of negative correlation between Bitcoin and gold prices indicates risk aversion.

It showed that traders were willing to hold less volatile assets like gold.

Also, Bitcoin underperformed with the weakness in the US dollar. This also reduced demand for digital assets, indicating a risk aversion and uncertainty in global markets.

Short-term Bitcoin holders also sold at a loss, as seen in the Output Profit Ratio (SOPR) which has been below 1 since August 27.

Source: CryptoQuant

Thus, traders who had been holding BTC for 155 days or less appeared willing to exit their positions, ignoring their profits for fear that prices could fall even further. It also showed the strength of the bear market trend.

Price view

The short-term and long-term trend for Bitcoin has been bearish as the price remains below the 50-day and 100-day Simple Moving Averages (SMAs).

The 50-day SMA, which was at $60,000 at press time, was direct resistance for BTC. If the price reaches this level, the short-term trend will turn upward.

However, for a more permanent rise, Bitcoin needs to reclaim the $63,000 level.

Source: TradingView

The Moving Average Convergence Divergence (MACD) indicator also showed a slight upward momentum. The MACD line has crossed above the signal line and the MACD histogram bars have turned green.

This trend showed that the bulls could be prepared. However, for this upward trend to continue, the MACD line must turn positive.

Despite the recent gains, the Bitcoin Fear and Greed Index is 31, which shows that the market is afraid. This could see demand continue to weaken.

The above is the detailed content of Bitcoin (BTC) Faces Challenges Despite 2.8% Gain, Short-Term Holders Exit the Market. For more information, please follow other related articles on the PHP Chinese website!