Bitcoin’s Support Looks Fragile Amid Weak Demand, Says Bitfinex Alpha
Bitcoin, the largest cryptocurrency by market capitalization, has fallen below its consolidation range of $106,000-$116,000 due to waning buying power. Long-term holders are selling about 104,000 BTC monthly, while large institutional buyers remain absent, causing further price declines. Uncertainty in the options market and unclear signals from the Federal Open Market Committee (FOMC) about growth and inflation have dampened investor confidence. BTC currently trades below $104,000 and risks dropping toward $100,000 unless significant trading activity pushes it back above $116,000, signaling potential recovery.
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BTC Breaks Consolidation Range Amid Waning Buying Power
The world’s largest crypto by market capitalization has failed to stay within its consolidation range of $106,000 to $116,000, according to Bitfinex Alpha. Buying power has waned, leading to little conviction from the bulls and a subsequent decline in investor confidence and sentiment. Although the crypto briefly climbed to $116,000 last week, offering temporary relief, long-term holders began selling, and big institutions did not step in to buy, resulting in a price decline.
Traders Turn Cautious Amid Shrinking Price Movements
Bitfinex noted that in the options market, price movements are becoming smaller. This reflects traders’ uncertainty about the direction of Bitcoin and a cautious stance following the big sell-off on October 10th. Overall economic factors have contributed to this lack of decisive development. For instance, the recent update from the Federal Open Market Committee (FOMC) provided unclear signals regarding growth and inflation, further dampening investors’ willingness to take risks.
Signs of a Weakened Market and Profit-Taking Behavior
Despite staying above the $106,000 support level, market data shows signs of weakening. On-chain analytics reveal that long-term investors are selling approximately 104,000 BTC each month, signaling a shift toward profit-taking rather than holding. At the same time, short-term traders are losing confidence as their profits shrink, while new buyers are hesitant to enter the market.
BTC Price Risks Dropping Toward the $100K Zone
Without renewed inflows from ETFs, BTC’s price is likely to stay constrained within its current range or decline further. According to CoinGecko, the digital asset is already trading below $104,000. Should BTC fall below this level, it risks sliding toward $100,000. However, a move above $116,000 with strong trading activity could signal the beginning of a real recovery as November approaches.
Market Perspectives on Recovery and Continuing Volatility
Market watchers remain unconvinced that Bitcoin has reached its peak. For example, despite the recent carnage in the crypto space, which saw BTC, ETH, and XRP plunge further with liquidations topping $1.1B, some analysts believe that the true reversal for Bitcoin is still far off. Additionally, retail activity has declined significantly, as seen with Binance reporting an 80% drop in deposits, reflecting a broader hesitance among market participants.