Elon Musk, Bitcoin, and the possibility of volatility

• The percentage of BTC supply in profit fell from 71% to 61%.
• BTC was still under $26,000, but a few metrics were bullish. 

Over the last few days, the crypto market witnessed a sudden downtrend, causing top coins like Bitcoin [BTC] and Ethereum’s [ETH] price to plummet. Not only was the effect limited to the market leaders, but altcoins with lower market caps also felt the heat. 

Read Bitcoin’s [BTC] Price Prediction 2023-24

Why did Bitcoin’s price sink?

Over the past few weeks, BTC remained comfortable under the $30,000 mark. However, investors were shocked on 17 August as the king coin witnessed a major drop, pushing its price below $26,000.

According to CoinMarketCap, BTC was down by more than 11% in the last seven days. At press time, it was trading at $25,897.22 with a market capitalization of over $503 billion. Additionally, its trading volume also sank by over 38% in the last 24 hours.

Though there might have been multiple factors at play that caused the entire market to turn red, Lookonchain pointed out what could have been the most potent trigger. Unsurprisingly, it was Elon Musk who ignited this episode.

Musk’s spacecraft engineering company, SpaceX, had sold $373 million worth of Bitcoin.

The price decline had a larger impact on BTC’s on-chain metrics. Glassnode’s recent analysis revealed that the percentage of BTC supply in profit has just fallen from 71% to 61%. This reflects the ‘top-heavy’ market, which has become increasingly price sensitive.

Moreover, Bitcoin’s number of UTXOs in loss just reached a one-month high of 41,944,655.958. Not only that, but whale activity around the coin dropped as its number of whales just reached a 1-month low of 1,599. 

Bitcoin showing signs of recovery

However, the market decline came to a halt, thanks to the Securities and Exchange Commission (SEC). This happened after the regulatory body revealed its plans to approve Ethereum futures ETFs.

According to a 17 August Bloomberg report, the SEC is unlikely to block the product, which has seen a lot of applications from numerous firms. Since then, BTC’s on-chain metrics have shown signs of recovery, giving hope that the king of crytpos’ value might witness an uptick.

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Notably, as per CryptoQuant, Bitcoin’s exchange reserve was decreasing, suggesting that the coin was not under selling pressure. The coin’s aSORP was green, which meant that more investors were selling at a loss, signaling a possible market bottom.

Moreover, BTC’s Relative Strength Index (RSI) was in an oversold position. This could increase buying pressure on the coin and, in turn, increase its price. 

Source: CryptoQuant