Bitcoin faces a potential correction amid whale selling and altcoin surge

Bitcoin (BTC) has experienced bearish sentiment in recent weeks, driven by increased selling pressure from large holders, commonly called whales.

Despite this, the total cryptocurrency market capitalization rebounded above $2.4 trillion while Bitcoin stabilized above $61,000. This stabilization comes amid heightened speculation in the altcoin market, particularly with the expected listing of Ethereum (ETH) spot ETFs in the United States, which has put further pressure on Bitcoin holders.

Institutional investors, led by firms like VanEck, have begun to diversify their crypto portfolios towards altcoins, with VanEck recently applying for a Solana ETF. This change has led to a gradual reversal of Bitcoin’s dominance pattern, potentially triggering the anticipated altseason. As more and more institutional money flows into altcoins, Bitcoin’s market position is facing growing challenges.

Bitcoin Price Critical Levels

Bitcoin price has been hovering around the lower boundary of its horizontal macro channel over the past few days. After bouncing from below $59,000 earlier this week, Bitcoin has consolidated above $61,000 without establishing a clear direction. Historically, Bitcoin has bounced off the $60,000 level multiple times in the past four months, suggesting a potential upside towards $66,000 in the coming weeks.

The supply of profitable Bitcoin addresses has decreased significantly, while the daily Relative Strength Index (RSI) remains near oversold levels. On-chain data from CryptoQuant indicates that Bitcoin price may rebound to a new all-time high due to reduced selling pressure from miners.

“The selling pressure of miners is weakening, and if all their selling volume is absorbed, it could create a situation where the bullish rally could continue again,” CryptoQuant noted.

Potential risks and market uncertainty

Despite the potential price upside, CryptoQuant did warned traders to remain vigilant if the price of Bitcoin drops and closes consistently below $56,000. This caution is based on the Metcalfe Price Valuation Bands, which suggest that a drop below this level could lead to a significant market decline.

The broader cryptocurrency market remains uncertain, with medium-term pessimism rising. More than two months after Bitcoin’s fourth halving, Bitcoin has yet to show the expected parabolic rally. Based on historical performance, popular crypto analyst Mags on the X platform predicts that Bitcoin’s price could hit $200,000 in the coming quarters.

Market dynamics are also being influenced by the accumulation of Bitcoin by US-based spot ETFs after a period of selling pressure. Demand for Bitcoin and other digital assets remains high among institutional investors and retail traders, partly due to unfavorable monetary policies by central banks.

THE upcoming elections in the United States are expected to fuel bullish sentiments in the cryptocurrency market. Additionally, the expected interest rate cuts in the United States will likely push more investors into Bitcoin and altcoins, supporting the ongoing macro bull run.

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