Key Takeaways
Why is Bitcoin’s price falling again?
Long-term holders sold more than 400,000 BTC in October, draining liquidity and reinforcing bearish sentiment.
What could change the BTC trend?
Analysts expect BTC to stabilize between $107,000 and $113,000 as demand recovers and liquidation pressure subsides.
Bitcoins [BTC] Optimism about October is fading as capital flight takes hold of the market
The bullish momentum that characterized October weakened sharply as capital outflows dominated the market. Bitcoin fell to $103,700 at the time of writing, the lowest level since October 17.
Oversupply causes weakness in the market
Bitcoin’s first drop on October 10 caused a distribution wave. Long-term holders – wallets that were inactive for at least six months saw a sharp decline by selling around 400,000 BTC, worth around $41.6 billion in October.
This shift confirmed that the same group that gathered over the summer was now driving the correction.
Source: CryptoQuant
In addition, whales increased the pressure. One large holder sold 13,004 BTC worth $1.36 billion, including 1,200 BTC during the first weekend of November.
This large-scale profit-taking pushed Bitcoin closer to the $100,000 zone, turning sentiment decisively bearish.
Weak demand is increasing the pressure
Demand for Bitcoin has weakened significantly and cannot match the pace of distribution in the market.
Apparent demand growth over the past 30 days turned negative, indicating there is insufficient liquidity to offset the ongoing sell-off.
Source: CryptoQuant
The one-year apparent demand band also shrank, showing that the net inflow of new participants decreased. In effect, this drop in demand left Bitcoin vulnerable to further downturn, even as broader macro conditions remained mildly supportive.
Shawn Young, principal analyst at MEXC Research, told AMBCrypto that there may be some recovery on the horizon.
“The accumulation of coins by major market participants, the trade deal between Washington and Beijing, and moderately positive stock market performance pave the way for a possible recovery in November,” he said.
A short-term decline is still possible
As demand begins to increase, Bitcoin may experience another dip before stabilizing.
The Liquidation Heatmap showed clusters forming near the aforementioned price levels, potentially dragging the asset to around $102,000.
These lower clusters could act as demand zones and pave the way for a recovery towards $110,000-$112,000.
Source: CoinGlass
Farzam Ehsani, CEO and co-founder of VALR, believes the market remains vulnerable.
“A 10% move in either direction could lead to massive liquidations – about $11.39 billion in short positions if prices rise, or $7.55 billion in long positions if they fall,” he said.
His outlook aligns with AMBCrypto’s analysis, which expects Bitcoin to consolidate within the $107,000-$113,000 range in the near term.