- Bitcoin price returns to its multi-year support trendline to determine its next major move.
- On-chain data show an OG Bitcoiner sold its asset amounting to more than $1.5 billion, providing additional selling pressure to the current downtrend.
- The absence of this key dataset leaves the Federal Reserve without fresh labor insights before the December FOMC meeting.
The pioneer cryptocurrency Bitcoin witnessed a sharp sell-off on Thursday, during the U.S. market hours. With an intraday loss of over 6%, the BTC price plunged to a low of $85,915, triggering a wide-market correction in other cryptocurrencies. The bearishness can be attributed to multiple factors, including U.S. macroeconomic uncertainty, selling pressure from old BTC whales, and short-term holders’ capitulation.
Why Bitcoin Price Plunged to $86,000
Over the past ten days, the Bitcoin price has plunged from $107,654 to the current trading value of $87,739, accounting for 18% loss. The recent downswing likely accelerated due to the following reasons.
Delayed U.S. Jobs Data Alters Fed Expectations
The U.S. Bureau of Labor Statistics surprisingly announced that the October non-farm payroll report will not be published, leaving the Federal Reserve without its typical monthly labor market report in advance of the December FOMC meeting. The next employment update is now to be given only after that gathering, forcing Chair Jerome Powell and his colleagues to make policy without the latest hiring and wage figures.
Market participants have rapidly re-priced the likelihood of a December rate cut downwards, with many now expecting to see either a pause or a reduced 25-basis point move at the most. Higher—and longer—interest rates make non-yielding assets less attractive, which triggers a general risk-off response that hits Bitcoin especially hard.
Massive Sale by Early-Era Whale
According to on-chain data tracker WalletAlert, a satoshi-era whale became active on November 20 and transferred coins that had been dormant for over 10 years. On-chain monitoring platforms monitored a series of transfers that amounted to more than $1.5 billion in current value, with the last amount of around 2,600 BTC, valued at around $230 million, sent directly to deposit addresses belonging to the Kraken exchange.
The sheet size of the sale amid the growing uncertainty in the crypto market has raised speculation on the motives behind this transfer.
Short-Term Holders Realizing Heavy Losses
Analytics from IT_Tech show investors who entered positions in the last 155 days are now liquidating with huge losses. Realized loss figures have reached multi-month highs, on par with corrections experienced in the summer of 2024 and in the summer of 2021. The aggregate cost basis for this short-term cohort currently is around $109,200, so the majority of those who have recently purchased an HFO are deeply underwater.
When the spot price trades significantly less than this realized-price-level for an extended period of time, it has historically been a sign of either capitulation and a rebound is imminent or the start of a more prolonged phase of bearishness, depending on whether or not buyers step in to defend the zone.
Bitcoin Price Seeks Support From Multi-year Support
With an intraday loss of nearly 6%, the Bitcoin price currently trades at $86,000, retesting an ascending support trend on the daily chart. Since mid-October 2022, this dynamic support has acted as a major accumulation zone for buyers to replenish the exhausted bullish momentum.
The past reversal from this trendline has triggered major rallies in Bitcoin, as the price recorded over 100% gain.
However, if the coin price breaks below this support trendline with a daily candle closing, the market selling pressure would accelerate and drive a major downtrend in this asset.
