Bitcoin Falls Toward Mid-$80Ks as Market Structure Weakens Into Year-End

Reports from FlowDesk, QCP, and Deribit indicate a market-wide bearish pattern. This has become particularly true in the case of Bitcoin. The old wallets are putting sustained selling pressure, which indicates that the previous long-term holders are exiting the market.

This market exit causes an increase in asset supply. The Federal Reserve’s decision to take on a more hawkish tone compounded this effect, and prices are finding it hard to maintain the support levels and are certainly not breaking any key resistance points.

Continuing Bear Market For Bitcoin

The changes in global interest ratings and an increased supply of assets have caused the Bitcoin price to plummet below $85,500. With a monthly drop of over 20% and a 24-hour window where the prices dropped by over 7%, these are all indicators that Bitcoin is in trouble. This is in stark contrast to the stock market, which has been strengthening itself in the past few days.

The whale wallets, which have been inactive for years, have opened up and are pouring Bitcoin into the market. This has sparked a spike in supply, with not enough demand to balance out the impact on price.

Since major fund managers are in a defensive position, locking in profits without re-investing for the future, the market’s liquidity has been seriously affected. With such strong selling pressure and no buy-back to rebound the prices, Bitcoin’s destiny for the coming days seems to be dominated by bears.

This price weakness has been reflected in the spot ETF products as well. With large institutional players positioning themselves for a much longer downtrend, the continuation of the dip is once again reinforced. As evidence of this, Flowdesk, the digital asset trading and technology company, noted open PUT option orders at much lower rates than the current market price.

The same trend is reflected in the options markets as the $85,000 mark for PUT options surpassed the $140,000 CALL options in investor demand. This level of multiple industry data shows Bitcoin may hit further lows this year.

Michael Saylor and MicroStrategy Under Pressure

The company MicroStrategy, co-founded by Michael Saylor, has most of its reserves pledged as Bitcoin. The Bitcoin veteran, Michael Saylor, has been receiving widespread criticism for his business model, which bases his company’s stock value on Bitcoin.

Most recently, amidst the chaotic market crash of Bitcoin, Peter Brandt, the renowned veteran commodity trader, is making a war cry against Saylor by requesting the US government to liquidate Saylor’s position and acquire his Bitcoin at much lower prices to be used as a strategic reserve.

If BTC hits a low of $74,430, it reaches MSTR’s average break-even point. This is a worrying situation for MicroStrategy as this could trigger its delisting from the MSCI index, according to JP Morgan. Such a liquidity loss in billions will further crash the crypto market, according to industry experts and analysts.

Rate Cuts Delayed Amidst Inflation

A report on Thursday noted that the persistent inflation in the US market has had a serious effect on Bitcoin’s price. The price fell by almost 7.32% to $85,700. With the overall market sentiment being that of extreme fear, the hopes that Bitcoin will rise soon are cut down by the delayed rate cuts from the Federal Reserve.

The stronger-than-expected US job rates are what is causing the delay in the Federal Reserve to move forward with the rate cuts. Coupling this with the thin liquidity and profit taking, Kronos Research CIO Vincent Liu predicts that a rebound for Bitcoin will require more force than what a Federal Reserve rate cut can offer.

Conclusion

The overall outlook for Bitcoin is bleak as supply pressures, weak liquidity, and delayed rate-cut expectations continue to unsettle markets. To add to this misery, Bitcoin is losing key institutional support amidst this crisis. 

Without the macro-elements and strong market sentiment supporting Bitcoin’s case, the prices may see further damage as 2025 is nearing its end.

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