Main points:
Bitcoin’s swift recovery post-Jackson Hole dissolved into a bearish weekly engulfing candle.
Onchain metrics indicate $105,000 as essential support while mid-sized wallets offload their holdings.
Seasonal downturn and fatigue surrounding spot BTC ETFs heighten the chances of a decline towards $100,000–$92,000.
Bitcoin (BTC) experienced a notable rebound on Friday, rising 3.91% to $117,300 from $111,700 after dovish remarks from the Jackson Hole symposium bolstered risk appetite.
This represented BTC’s most robust daily gain since July 10, instilling hopes for another push towards record highs. However, momentum swiftly diminished, with Bitcoin retreating over the weekend to $110,600 by Monday.
A bearish weekly engulfing candle highlights downside risks, as onchain data indicates widespread distribution among holders.
Glassnode data reveals that all BTC wallet cohorts have entered distribution, with the 10–100 BTC group leading the trend. The coordinated actions across wallet sizes suggest uniform sell-side pressure, impacting price stability.
Furthermore, analyst Boris Vest observes varying wallet behaviors: smaller holders (0–1 BTC) have consistently accumulated since the peak, while 1–10 BTC wallets have resumed purchases below $107,000. In contrast, the 10–100 BTC group has transitioned to net sellers after $118,000, while large holders above 1,000 BTC continue to distribute their assets.
However, the 100–1,000 BTC cohort displays a division between accumulation and distribution around $105,000, signifying it as critical support and the last line of defense before significant corrections.
Recent realized price data reinforces this pivotal point. The realized price for one to three-month holders stands at $111,900, while those holding for three to six months and 6–12 months are much lower at $91,630 and $89,200, respectively.
The significant discrepancy highlights heavy short-term positioning near recent peaks, contrasting with long-term holders whose cost bases hover around $90,000.
Market analysis indicates that if Bitcoin drops below $105,000, the absence of dense cost support between current levels and $90,000 could accelerate downward momentum. Such a fall may compel recent buyers to capitulate, leaving the $92,000–$89,000 range as the next significant demand zone.
Related: Bitcoin late longs wiped out as sub-$110K BTC price calls grow louder
Bitcoin seasonality and ETF fatigue emerge
The ongoing pullback corresponds with Bitcoin’s seasonal patterns. Traditionally, the period from August to September signals weakness, often exacerbated by Asia’s “ghost month,” which is observed this year from Aug. 23 to Sept. 21. Cointelegraph reported that this interval frequently aligns with diminished risk appetite and profit-taking among traders.
Since 2017, Bitcoin has recorded an average ghost month decline of 21.7%, with notable drops of –39.8% in 2017 and –23% in 2021. Based on these averages, a drop towards the $105,000–$100,000 range remains aligned with seasonal trends and technical support levels.
Furthermore, crypto trader Roman Trading highlights structural risks in BTC’s current rally. The analyst noted that BTC/EUR has not achieved a new all-time high since last year, indicating that the recent rise is more related to a weakening US dollar rather than genuine demand.
Roman cautions that enthusiasm following the launch of the spot Bitcoin exchange-traded fund (ETF) may be waning, with higher-timeframe exhaustion resembling previous distribution phases.
Related: Bitcoin OG whales to blame for BTC’s painful rise: Willy Woo
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
