Bitcoin Faces Potential Correction Amid Whale Sell-Offs and Altcoin Surge

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

Despite this, the total crypto market cap rebounded above $2.4 trillion as Bitcoin stabilized above $61,000. This stabilization comes amidst heightened speculation in the altcoin market, particularly with the anticipated listing of spot Ethereum (ETH) ETFs in the United States, which has placed additional pressure on Bitcoin holders.

Institutional investors, led by firms such as VanEck, have begun diversifying their crypto portfolios towards altcoins, with VanEck recently filing for a Solana ETF. This shift has resulted in a gradual reversal pattern in Bitcoin dominance, potentially triggering the expected altseason. As more institutional money flows into altcoins, Bitcoin’s market position faces increasing challenges.

Critical Bitcoin Price Levels

Bitcoin’s price has been hovering around the lower boundary of its horizontal macro channel for the past several days. After rebounding from below $59,000 earlier this week, Bitcoin has consolidated above $61,000 without establishing a clear direction. Historically, Bitcoin has rebounded from the $60,000 level multiple times over the past four months, suggesting a potential rally toward $66,000 in the coming weeks.

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

“Selling pressure of miners is weakening, and if all of their selling volume is absorbed, a situation may be created where the upward rally can continue again,” CryptoQuant noted.

$BTC – Miners' selling pressure decreases

“Selling pressure of miners is weakening, and if all of their selling volume is absorbed, a situation may be created where the upward rally can continue again.” – By @DanCoinInvestor

Read more https://t.co/X4J2brhuQu pic.twitter.com/5dI0vB2HgE

— CryptoQuant.com (@cryptoquant_com) June 28, 2024

Potential Risks and Market Uncertainty

Despite the potential price rally, CryptoQuant has cautioned traders to remain vigilant if Bitcoin’s price falls and consistently closes 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 downturn.

The broader cryptocurrency market remains uncertain, with increased midterm pessimism. More than two months after the fourth Bitcoin halving, Bitcoin has yet to exhibit the anticipated parabolic rally. Based on historical performance, popular crypto analyst Mags on the X platform predicts that Bitcoin’s price could reach $200,000 in the coming quarters.

#Bitcoin has topped out ?

A consolidation or dip after the Bitcoin halving is very common, as seen in each cycle. Historically, these dips have been a good time to accumulate some Bitcoin.

Many people confuse this with distribution or a cycle top and end up selling early or… pic.twitter.com/6qHHbpzWhR

— Mags (@thescalpingpro) June 28, 2024

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

The upcoming United States elections are expected to foster bullish sentiments in the crypto market. Additionally, anticipated interest rate cuts in the United States will likely drive more investors towards Bitcoin and altcoins, supporting the ongoing macro bull run.

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