The recent price action of Bitcoin shows a continued weakness as the asset struggles to find direction amid weak macroeconomic signals, presenting a bullish-neutral forecast.
The lack of momentum has kept BTC on a downward trend for several days, but the expected 25 basis point interest rate cut by the Federal Open Market Committee on Wednesday could change sentiment. Whether this becomes a catalyst heavily depends on the behavior of short-term holders.
Bitcoin holders may present some challenges
The STH to LTH ratio in the supply has recently risen from 18.3% to 18.5%, surpassing the upper band of 17.6%. This signals an increasing presence of short-term holders within Bitcoin's supply mix.
Their presence increases speculative activity, which can enhance liquidity but also generate sharper intraday swings. This shift highlights a market ready for volatility if conditions change rapidly.
This higher ratio also suggests that STHs have a greater influence on Bitcoin's immediate trajectory. Their tendency to sell when in profit has historically limited recoveries. If the FOMC rate decision triggers a rally, STH behavior will determine whether the momentum holds or fades.
Want more insights on tokens like this? Subscribe to the daily Crypto newsletter by Editor Harsh Notariya here.
The percentage of Bitcoin supply in profit has increased from 66.5% to 67.3%, with a modest gain of 1.2%. Although the upward movement is positive, the metric remains well below the high band of 98.4% typically seen in strong bullish phases. This indicates that a significant portion of the supply is still underwater, reflecting a cautious environment rather than euphoric strength.
This contained profitability aligns with accumulation behavior in the early stages. Investors appear selective and patient, waiting for stronger macro signals before committing. If the FOMC rate cut increases risk appetite, this profitability discrepancy leaves room for expansion and a stronger follow-through.
The price of Bitcoin is at $90,399 at the time of writing, situated just below a downward trend that has persisted for a month and a half. BTC is trying to turn $90,400 into a support level, which would mark the first step towards reversing the trend.
If macro conditions align and rate cuts boost overall market optimism, BTC could bounce sharply. A clear bounce from $90,400 could favor a retest of $95,000, and breaking that resistance would open a clear path towards the much-anticipated $100,000 level, demonstrating the correctness of the Bitcoin price forecast.
However, if short-term holders sell aggressively, Bitcoin may struggle to maintain upward pressure. A rejection from $95,000 or failure to break the downward trend could bring BTC back to $86,822, invalidating the bullish scenario.
