Bitcoin Price Plunges below $60k amid $34 Billion Drop in Whale Demand

Bitcoin Price Analysis

Bitcoin price declined towards $58,500 on August 12, marking a 7% drop from last week’s peak. On-chain data reveals a steady decline in whale demand for BTC. As the new week unfolds, market participants are questioning whether Bitcoin prices could plunge further.

Russia’s New Crypto Law Fails to Lift BTC to $70k

Bitcoin price showed resilience after the August 5 market crash, recovering amid positive shifts in the global crypto regulatory landscape. Key catalysts like Solana ETF approval in Brazil, SEC’s lenient fine, and Russia’s legalization of crypto mining initially drove optimism.

Market participants anticipated that Russia legalizing crypto mining would significantly benefit Bitcoin, given its Proof of Work (PoW) nature. Consequently, Bitcoin price surged by 27% between August 5 and August 9, reaching a temporary peak.

However, the regulatory boost failed to sustain the Bitcoin price rally. The short-term nature of these regulatory changes, coupled with the fact that Russia’s crypto mining law won’t take effect until November, limited Bitcoin’s upward momentum. The attached BTC/USD price chart illustrates this pattern, highlighting the sharp price decline that followed the initial surge.

This situation has sparked concerns that traders, rather than waiting for long-term gains, are capitalizing on the positive sentiment to sell. As the media euphoria cools, Bitcoin price dropped 8.13% in the last 72 hours, demonstrating the fragility of the recent rally.

Whale Demand for Bitcoin Declines by $34 Billion

On-chain data paints a bearish picture for Bitcoin. Whale investors’ reactions have contradicted early expectations, suggesting that the rejection from $60,000 on Monday morning could lead to a prolonged correction phase.

According to IntoTheBlock’s Large Transactions chart, which tracks whale investors’ activity around key market events, Bitcoin price saw reduced demand from large institutional investors. The chart shows that during last week’s bullish news events, BTC whale transactions decreased from $72.08 billion to $34.29 billion between August 5 and August 11.

This $34 billion decline in whale demand occurred despite Bitcoin price rising up to 27% during that period. The lack of significant whale support for the rally explains why Bitcoin was unable to sustain its momentum and faced rejection at the $62,000 level over the weekend. With Bitcoin price now below $59,000 as of Monday morning, continued downward volatility appears likely, particularly if whale demand remains weak.

Bitcoin Price Forecast: $55k Reversal on the Cards

The combination of reduced whale demand and recent price action suggests a bearish outlook for Bitcoin price in the near term. Technical indicators on the BTC/USD chart further validate this perspective, highlighting key levels to watch.

Bitcoin price is currently facing significant resistance at the $60,000 mark. The Relative Strength Index (RSI) is trending downwards, hovering just above the oversold territory. This suggests limited buying interest at current levels, which could result in further downside pressure.

Moreover, the Chande Kroll Stop, a volatility-based indicator, signals a potential reversal, with a support zone forming around the $55,000 level. Should Bitcoin price breach this support, the next level to watch would be $52,000, which represents a critical support area based on recent trading activity.

In conclusion, Bitcoin price faces a challenging week ahead. The combination of weakening whale demand and bearish technical signals points to a potential reversal toward $55,000. Investors should remain cautious and closely monitor key resistance and support levels as the market unfolds.