Bitcoin Price News: Whales Buy the Dip But $80K Retest Seems Likely

Bitcoin (BTC) has dropped sharply in the past 24 hours, losing 6% already and bringing its 30-day losses to 22% as a result.

The price action seems to have fully rejected a move above $90,000, even though macroeconomic conditions recently improved.

Crypto long liquidations have spiked to $641 million today as a result of the drop. However, although traders are losing their shirts due to this latest setback, Bitcoin whales are stepping in to capture the falling knife.

Bitcoin’s Whale Count – Source: Bitwise

According to Bitwise, the number of Bitcoin wallets that are holding over 1,000 BTC tokens (around $85 million at the time of writing), has spiked in the past few days as the token dropped.

Since its October all-time high, BTC has shed nearly a third of its value. It seems that deep-pocketed investors have already flagged this as a major opportunity to grab some tokens with the expectation that the price will recover in the next few months.

The metric spiked from a low of around 1,350 to nearly 1,450 in just a few weeks, reflecting the market’s growing interest in the token at its current price.

Market Still In Panic Mode as BTC Rejects Move Above $90K

Sentiment remains heavily depressed, as the Fear and Greed Index sits at 20 after recently hitting an all-time low of 11. Nonetheless, the last time this happened, this was actually a contrarian signal as BTC rallied to an all-time high just a couple of months after.

Fear and Greed Index – Source: CoinMarketCap

Whales may be expecting that a similar situation will unfold over the next few weeks, especially if the Federal Reserve cuts rates for a third time this year, as analysts expect.

Lower rates result in a lower U.S. dollar, and encourage risk taking as investors have to chase higher yields in more exotic corners of the market – e.g. cryptocurrencies.

We recently predicted that a long-dated trend line breakout could result in big losses for BTC down the road, and thus far that analysis has held up quite well.

Bearish Breakout of 50-Week EMA Spells Big Trouble for BTC

The price broke below the 50-week exponential moving average (EMA) three weeks ago. The last time this bearish breakout occurred, BTC lost 62% of its value.

BTC/USD Daily Chart (Coinbase) – Source: TradingView

History does not necessarily repeat, but it often rhymes. If we get a similar drop, the top crypto could land at $38,000 in the next few weeks. Macroeconomic conditions right now are not the same as back then, as rates were actually rising when that steep drop occurred.

In this case, rates are dropping. The latest risk-off move could have been the result of early whales cashing out of their bets as BTC made a new all-time high. However, deep-pocketed investors seem to be coming back to the market, and that could mean that the token could hit a floor soon.

The most likely short-term target for BTC at this point would be $78,000, meaning a mild downside risk of nearly 6%. However, if the price keeps dropping, the next stop would be the low 50,000s, meaning a much higher loss.