Bitcoin (BTC) is down 2.3% to $57,070 this
week, recovering most of the early 16.0% losses after plunging to $49,035. The
sell-off was triggered by a weak U.S. labor market report for July, which
heightened recession fears. The S&P 500 broad market index fell by 6.0%,
while the tech-heavy Nasdaq 100 index tumbled by 8.0% over just two trading
days.
Bitcoin's failure to act as a digital gold, a
role often touted by crypto enthusiasts, was evident. It lost 24.0% in just two
days, significantly underperforming the Nasdaq 100 and declining much more than
gold. This sharp drop calls into question Bitcoin's reputation as a safe haven.
However, large Bitcoin holders, or whales,
seemed unperturbed. According to IntoTheBlock, wallets holding 1,000-10,000 BTC
did not partake in the recent sell-off, unlike smaller holders with less than 1
BTC. Similarly, major Bitcoin ETFs like IBIT from BlackRock, FBTC from
Fidelity, and GBTC from Grayscale saw net inflows of $541.5 million last week,
despite a $107.2 million net outflow in the first couple of days this week.
This suggests that panic among smaller investors might have driven the
sell-off.
Whales and other large investors appear to
have a long-term positive outlook on Bitcoin. Significant call options worth
$1.0 billion, set to expire in September, December, and March 2025, indicate
bets on Bitcoin reaching $90,000-$100,000. These investors are buying the dip,
anticipating that Bitcoin's price will rise to these levels unless a major
market panic occurs, which currently shows no signs.
Technically, Bitcoin has strong support at
$50,000-$52,000. While prices may retest this level in August, September and
October are expected to be highly positive for the cryptocurrency. Those
planning to join the post-halving Bitcoin rally should consider making their
trading decisions now.