Key Points
- Bitcoin’s smart money sentiment has shifted towards fear, indicating possible profit-taking.
- Despite this, Bitcoin is still on track to close September with significant gains.
Bitcoin [BTC] began this week with a bearish tone, following a period of bullish weakness over the weekend. The cryptocurrency had a steady rally over the past three weeks, but could be on the brink of a pullback.
Resurgence of Bullish Sentiment
The Bitcoin rally aligned with a strong resurgence of bullish sentiment this month. Particularly, the crowd sentiment moved aggressively from fear to greed in just a few weeks. Similar shifts were seen in smart money sentiment, which generally has more influence over directional changes.
However, BTC’s smart money sentiment recently moved back towards fear. This coincides with the resurgence of sell pressure this week, while the crowd sentiment remained on the side of greed.
Large Holder Flows
An examination of large holder flows revealed a decrease in Bitcoin address inflows over the past 10 days, with a net increase in large holder outflows during the same period. Large holder inflows were down to 101.15 BTC during Sunday’s trading session, while large holder outflows were higher at 360 BTC. This confirms a shift from bullish to bearish momentum among large addresses.
There was also a significant increase in sell volume in the last 24 hours, though not as high as on Friday. The difference is that the level of liquidations has been decreasing, unlike the rising liquidations last week. A slight increase in the number of shorts executed in the last 24 hours also confirms a surge in bearish sentiment.
Despite the resurgence of sell pressure, Bitcoin is on track to close September in the green. BTC traded at $64,073 at press time, representing an 8.67% increase from its September opening price. The cryptocurrency achieved a 26.64% gain from its lowest to highest price in the last four weeks.
The latest BTC pullback has not shown strong sell pressure. However, the market is still subject to change, particularly in the event of a major FUD event. If a massive surge in sell pressure occurs, Bitcoin may find its next support level between $57,955 and $59,589.
On the other hand, if Bitcoin begins September on a bullish note, a bullish flag breakout could be witnessed. This would further substantiate its recovery and potential push into price discovery.