Bitcoin price was mostly lower as bullish sentiment wanes while bulls managed to put a halt to the downturn
Bitcoin price is trading at $47,388 at press time and is down about 4% over the past 24 hours. Technical charts suggest the pullback could stabilize between the $42,000 – $45,000 support zone.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price pullback deepens; expect higher volatility
The euphoria seen in the crypto ecosystem over the past few weeks has evaporated as the early morning attempt by the bulls to push the Bitcoin price to $50,000 was conspicuously rejected. After the rejection, the price dropped to a low of $46,457 before the bulls attempted to regroup and halt the downturn.
The $50,000 price level was identified as a critical area for BTC. Bitcoin is likely to spend some time in a downward trend following this latest pullback, but there is a significant amount of support at the $44,000 level that could protect it from further decline.
A possible short-term bearish pullback based on exchange inflows and whale wallet activity. Large holders often referred to as whales (addresses with 1,000 – 10,000 BTC), have been distributing their holdings. Smaller holders (addresses with 1 – 1,000 BTC), however, have been adding to positions, which could mean that retail investors have fueled the recent Bitcoin rally.
The fact that large holders are in profit-taking mode is an unfavorable situation and leans bearish.
Bitcoin whales are selling | Source: Delphi Digital
However, the good news is Bitcoin just made history with its largest day of exchange inflow since June 19, 2019. These days are now tied for the largest inflow day of all time, both with 1.68M BTC flowing to exchanges on these respective days.
The Fear & Greed index will cause the market to correct. Continuing its upward trajectory from the last couple of weeks. The index had gradually made its way out of “Extreme Fear,” when the market seemed to be in its most vulnerable. Prices were crashing from both Bitcoin to altcoins. This saw sentiments decline into negative.
The index went into a state of Greed at and above 50 for a while. However, it has jumped into “Extreme Greed” once more now at 79. It was indicating that investors were back putting money into cryptocurrencies. At press time, the index is showing about 71, representing the “Greed” level.
Crypto Fear & Greed Index as of August 25 | Source: Alternative.me
Today’s altcoin market is also nothing to talk about. Almost all cryptocurrencies recorded a drop of around 5% on the day. Meanwhile, SOL is unexpectedly up 15% in the past 24 hours, trading at $83 at the time of writing. The overall cryptocurrency market cap now stands at $2.014 trillion and the Bitcoin Dominance rate is 44.1%.
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