Bitcoin’s price has experienced a significant decline this week. After reaching a high of $63,750 on Monday, it has fallen for three consecutive days and is now at its lowest level since May of this year. It has entered a bear market after dropping by 20% from its peak in 2024.
Bitcoin’s fundamentals are not strong
Bitcoin price has sold off as demand for the coin wanes and supply rises. Most of the new supply is coming from the governments of Germany and the United States, which have been liquidating some of their holdings.
Many Bitcoin mining companies have also capitulated and started selling their coins in the past few months. These companies are selling the tokens in a bid to raise cash to boost their mining investments after April’s halving.
Moreover, CoinGlass data shows that the amount of Bitcoin balances in exchanges is rising, which is also a bearish sign.
At the same time, there are indications that some Bitcoin whales have initiated the process of selling off their holdings. This week’s data revealed that a whale transferred Bitcoin tokens valued at $168 million to Binance, indicating a sell-off.
Further data shows that the futures open interest has continued to drop in the past few weeks. According to CoinGlass, the open interest dropped to over $30 billion on Thursday, down from the year-to-date high of over $37 billion. Most of this open interest is in exchanges like Binance, Bitget, and OKX.
Bitcoin price is also falling as the industry lacks a clear catalyst to push it higher. The Securities and Exchange Commission (SEC) has already approved spot BTC ETFs and has signaled that it will approve Ethereum ones. Also, the Bitcoin halving event has already happened, and the Fed has signaled that it will hold rates higher for longer this year.
Bitcoin price prediction
The other reason BTC has more downsides is that technical support is unavailable. The daily chart above shows that Bitcoin’s price struggled to move above the key resistance point of $71,778 this year. It has formed a quadruple-top pattern whose neckline is at $56,426.
Recent attempts for Bitcoin to rebound have failed, with the most recent one happening at $63,750. It has also remained below the 50-day Exponential Moving Average (EMA) and is slightly above the 200-day MA.
Therefore, a break below the 200-day EMA and the support at $56,426 will mean that bears have prevailed, which will push the token much lower. Such a move could see it drop to the key support at $50,000.
