Potential Bitcoin Correction Below $50,000 as Whales Capitalize on Profits

Bitcoin is facing potential downward pressure as the upcoming U.S. interest rate cut approaches. The question remains: will it dip below the $50,000 threshold this weekend?

As we move into September, a historically bearish month, there is increasing speculation about a possible drop of Bitcoin below the key $50,000 mark. This scenario is particularly likely if profit-taking from large holders occurs.

Data suggests that one prominent whale sold 100 BTC, equating to over $5.3 million, to secure a profit exceeding $206,000. In total, 402,000 BTC valued at more than $21 billion was acquired by wallets aiming to break even, as reported by on-chain analytics firm Lookonchain:

“836,000 addresses bought ~402,800 $BTC ($21B) at a price between $51,113 and $54,303. These addresses are likely to sell near the breakeven.”

The selling patterns of whales often serve as indicators for traders, potentially signaling the short-term price movements of cryptocurrencies.

Expert Predictions for Bitcoin’s Future

Arthur Hayes, the former CEO of BitMEX, warns that Bitcoin could face a correction below the $50,000 level. In a recent post, he stated:

“BTC is heavy, I’m gunning for sub $50k this weekend. I took a cheeky short. Pray for my soul, for I am a degen.”

As of September 7, Bitcoin’s price has already dipped to $54,340, losing its key support at $55,000, marking an almost 8% decline over the week.

Analysts at Bitfinex anticipate that a correction below $50,000 could occur prior to a substantial market rally. They emphasize that this level is significant, noting that the typical peak in return diminishes drastically with each cycle.

Downward Pressure Expected Ahead of Interest Rate Decision

The impending interest rate decision by the Federal Reserve may influence investor sentiment regarding riskier assets like Bitcoin.

However, Alvin Kan, COO of Bitget Wallet, predicts continued downward pressure on Bitcoin ahead of the September 18 rate announcement:

“We expect BTC and the equity markets to face downward pressure leading up to the Fed’s official rate cut announcement. Once the rate cut is confirmed, we may see a short- to mid-term boost in risk assets.”

Whale trading activity could also have significant implications for Bitcoin’s price trajectory. Kan adds the following insights:

“In the current volatile market, there’s a likelihood of BTC encountering liquidity issues, leading to sharp, temporary price drops. Right now, there’s about a 40% chance of BTC dipping below $50,000.”

Investor expectations are rising for an interest rate cut from the Federal Reserve during its meeting on September 18.

Recent data from the CME FedWatch tool presents a 70% probability for a 25 basis-point rate cut and a 30% chance for a 50 basis-point cut.