Bitcoin price served up an unexpected capitulation this week, after giving up its minimal weekend gains.
A clear sign that the bears were not yet ready to give up their reign. But even more interesting is what this outcome did to the market sentiment.
A sharp decline in the crypto fear and greed sentiment accompanied the bearish Bitcoin price action. The latter fell as low as 21 points on Tuesday, which was the lowest level observed since April.
The bearish outcome also yielded another Bitcoin price slide below $100,000. The last time that it retested the same levels was in June.
This also demonstrated just how much the negative sentiment had prevailed. For context, both price and sentiment fell below levels observed during the October flash crash.
The bearish outcome also led to a sizable uptick in Bitcoin exchange reserves. The reserves surged from 2.386 million BTC on Monday to 2.393 million BTC at the time of observation.
Bitcoin Price Risks Further Downside
The $100,000 price level has been a key support level underscoring bullish resilience. Pullbacks below the same level thus signal declining bullish confidence.
Bitcoin price dropped below $99,000 but it had since recovered back above $104,000 after bouncing back near $98,000. The recovery signalled that there was significant accumulation at the support level.
Recent recovery attempts demonstrated weak demand, especially from whales. This is why BTC may risk further downside if demand fails to make a strong comeback.
If BTC faces further demand weakness, then price may extend downside. The next key price support levels include $93,000, $84,000 and $75,000.
Whether Bitcoin price will achieve a sizable recovery from its current levels may depend on various factors, including the level of demand.
For example, Bitcoin ETFs have been contributing to the sell pressure but discounted prices may encourage a demand resurgence.
Heavy retail outflows were also observed recently, in line with the sentiment shift in favour of the bears. However, some market data offered insights into the level of demand popping up after the downside.
Bitcoin Longs Make Significant Comeback
Whales often play a huge role in BTC’s recovery every time price dips substantially. However, whale activity in October was relatively subdued, which was indicative of low confidence in an explosive Bitcoin price move.
Any recoveries during the last few weeks have thus been weak, paving the way for bearish capitulation. Assessing whale activity may therefore offer insights into the next market move.
Large order book statistics data on Coinglass revealed that whales executed about $2.2 billion worth of long positions on Binance and OKX in the last 2 days. This signalled that they were betting on some recovery.
However, spot flow data revealed that whales acquired only about $6.79 million worth of BTC on OKX.
However, Binance and Coinbase still contributed about $87 million worth of spot outflows.
Interestingly, these are among the top exchanges hence confirming that demand was not yet there yet especially among Bitcoin whales.
On the retail side, Bitcoin achieved about $391 million worth of spot demand in the last 24 hours (Wednesday). This was the second highest daily spot inflows observed since the October crash.
The spot inflows in the last 24 hours contributed to the bounce back from the Bitcoin price support level just below $99,000.
Sustained buying may fuel more recovery. However, weak spot demand from whales may once again point towards a limited recovery.