Bitcoin (BTC) Falls Below $57,000 Again Amid Strong Selling Pressure

• Bitcoin falls below $57,000 due to major institutional selling and market pressure.
• Short-term holders face unrealized losses, which could trigger market volatility if they decide to cut their losses.
• $51,000 is a crucial support level and long-term investors could see this as a buying opportunity.

Bitcoin (BTC) has fallen below $57,000 again as its turbulent run continues. At press time, BTC was trading at $56,749.40, down 5.32% in a week.

The latest decline is due to a confluence of factors including significant institutional sales, pressure from short-term holders facing unrealized losses and continued selling in the cash market.

Institutional Sales Impact Bitcoin Price

One of the main factors behind the Bitcoin price decline is the strong selling activity by institutional investors. Major players such as Fidelity, Grayscale, Ark Invest, and Ceffu have contributed significantly to the downward pressure.

Fidelity leads the charge, having sold 16,000 BTC, valued at approximately $915 million. Grayscale follows with the offloading of 15,000 BTC, worth approximately $858 million. Ark Invest has offloaded 7,000 BTC worth approximately $400.4 million, while Ceffu has sold nearly 3,124 BTC, for a total of approximately $178 million.

Institutions are abandoning BTC
Since August down
Fidelity sold 16,000 BTC worth $915 million.

ArkInvest sold 7,000 BTC worth $400.4 million

Grayscale sold 15,000 BTC worth $858 million.

Alongside this, Ceffu sold nearly 3124 BTC… pic.twitter.com/4PlbMcGDLH

— Wise Advice (@wiseadvicesumit) September 5, 2024

This institutional selling has been a crucial factor in Bitcoin’s fall. The substantial transfers of Bitcoin to exchanges suggest that these major players are taking profits or rebalancing their portfolios.

Interestingly, while these institutions are actively selling, BlackRock has maintained a neutral stance, avoiding both buying and selling Bitcoin amid the current market fluctuations.

Risk of massive exit from positions by short-term holders

Selling pressure is further exacerbated by the situation of short-term Bitcoin holders, who are currently facing significant unrealized losses.

According to Glassnode dataShort-term holders who acquired Bitcoin in the past six months are experiencing financial stress, with their average price hovering between $59,000 and $65,200, significantly above the current market price.

The financial pressure on this cohort is evident in key indicators, and its potential for massive exits from positions poses a considerable risk of increased market volatility.

Even if the average Bitcoin investor remains profitable, substantial unrealized losses among short-term holders could potentially trigger broader market weakness if they decide to cut their losses.

The $51,000 price level is highlighted as critical support that…