NOIDA (CoinChapter.com) — Bitcoin (BTC) experienced a brief rally recently, with the token’s price spiking over 10% since Sept. 6 to a daily high near $57,750 on Sept. 11. However, this rise was short-lived, as BTC sharply dropped to $56,100 on Sept. 11, nearly erasing its recent gains.
Despite positive momentum earlier in the month, the selloff reflects deep-seated concerns over Bitcoin’s ability to sustain any meaningful recovery in the near term.
Bearish Cues from Whale Activity and CoinShares Data
A key concern for Bitcoin’s price is the behavior of large holders, specifically those with balances between 100,000 and 1 million BTC (red line).
These whales have shown little interest in accumulating more Bitcoin, remaining largely inactive throughout the recent market movements. The absence of significant buying pressure from this cohort suggests a lack of confidence in the current price levels.
Historically, their inactivity has often preceded periods of price stagnation or decline, as they play a crucial role in driving major price trends.
Additionally, more alarming is the substantial selloff by mid-sized whales (10,000 to 100,000 BTC in pink), who have been steadily reducing their holdings. This category of investors, often seen as major market influencers due to their sizable positions, has shown clear signs of exiting the market.
Their continued selling points to growing pessimism about Bitcoin’s short-term prospects. This selloff, in combination with the broader risk-off sentiment, typically leads to prolonged price declines as liquidity leaves the market and demand from significant holders weakens.
Furthermore, the CoinShares data corroborates the bearish sentiment. Bitcoin suffered $643 million in weekly outflows, indicating institutional investors might be losing faith in its immediate prospects. The inflow into short-Bitcoin products ($3.9 million) is dwarfed by the outflows, underscoring the market’s negative bias.
The fact that more capital flowed into bets against Bitcoin’s price recovery suggests that bearish sentiment is gaining traction, with investors positioning for further downside.
Moreover, while smaller retail investors (100 to 1,000 BTC in yellow) have increased their positions, this is typically a weak counterbalance to the selloff from larger players. Retail investors lack the financial power to counter whale liquidations, making it unlikely to prevent price declines.
Technical Setup Adds To Bearish Cues Against Bitcoin Price
Meanwhile, the BTC USD pair has formed a bearish setup called the ‘descending triangle.‘
Analysts identify the descending triangle as a bearish continuation pattern, characterized by a descending upper trendline that compresses price action into lower highs, while a flat lower trendline provides weakening support.
This setup intensifies selling pressure as rallies struggle to breach resistance, leading to progressively weaker buyer attempts. The battle between bulls and bears typically ends with a breakdown below the lower trendline.
Traders estimate the potential downside by measuring the vertical distance from the highest point of the triangle to the flat support line, projecting this distance downward from the breakout point.
Recently, BTC’s price dipped below the pattern, briefly indicating a bearish breakout. However, bulls managed to push the price back within the pattern, raising the possibility of a bull trap.
If the BTC/USD pair confirms the pattern, the token could drop more than 31%, with a target near $39,370.
