Key takeaways:
Bitcoin’s rapid recovery after Jackson Hole ended with a bearish weekly engulfing candle.
Onchain data indicates $105,000 as the critical support level as mid-sized wallets liquidate.
Seasonal weakness and fatigue over spot BTC ETFs heighten the chances of a drop towards $100,000–$92,000.
Bitcoin (BTC) experienced a significant rebound on Friday, rising 3.91% to $117,300 from $111,700 after dovish remarks at the Jackson Hole symposium heightened risk appetite.
This represented BTC’s strongest daily gain since July 10, boosting expectations for a push towards new all-time highs. However, that momentum quickly faded, with Bitcoin declining over the weekend to $110,600 on Monday.
A bearish weekly engulfing candle highlights downside risks, as onchain data reveals widespread distribution among holders.
Information from Glassnode indicates that all BTC wallet cohorts have transitioned into distribution, primarily driven by the 10–100 BTC group. This synchronized selling behavior across wallet sizes adds pressure to price stability.
Additionally, analyst Boris Vest notes differing behaviors among wallet sizes: smaller holders (0–1 BTC) have been accumulating since the peak, while 1–10 BTC wallets resumed buying below $107,000. Conversely, 10–100 BTC wallets have turned net sellers after $118,000, and large holders over 1,000 BTC continue to distribute.
However, the 100–1,000 BTC cohort is divided between accumulation and distribution around $105,000, designating it as the crucial support level and the last stronghold before significant corrections.
Bitcoin realized price data highlights this pivotal point. The realized price for one to three-month holders is $111,900, while the three to six-month and 6–12 month cohorts are significantly lower at $91,630 and $89,200 respectively.
The substantial gap reflects heavy short-term positioning near recent highs, contrasted with longer-term holders whose cost bases are closer to $90,000.
Market analysis suggests that if Bitcoin falls below $105,000, the scarcity of strong cost support between current levels and $90,000 could speed up downside momentum. This decline may force recent buyers to capitulate, positioning 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 take effect
The present pullback coincides with Bitcoin’s seasonal trends. Traditionally, the period from August to September has shown weakness, often intensified by Asia’s “ghost month,” occurring this year from Aug. 23 to Sept. 21. Cointelegraph has found that this timeframe typically aligns with a diminished risk appetite and profit-taking by traders.
Since 2017, Bitcoin has averaged a ghost month decline of 21.7%, with significant drops of –39.8% in 2017 and –23% in 2021. Based on these averages, a decline towards the $105,000–$100,000 range is consistent with seasonal trends and technical support levels.
Additionally, crypto trader Roman Trading highlights structural risks associated with BTC’s current rally. The analyst notes that BTC/EUR has not achieved a new all-time high since last year, indicating that the recent gains may be more a result of a weakening US dollar than genuine demand.
Roman also cautions that enthusiasm surrounding the post-spot Bitcoin exchange-traded fund (ETF) launch might 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.
