O Bitcoin (BTC) the price is facing significant downward pressure. As of now, BTC trades at around $64,000, remaining stagnant amid unfavorable market conditions. Meanwhile, analysts are worried about dumb money encroaching on the territory and driving down the price of Bitcoin.

Dumb Money vs BTC

According to data from IntoTheBlock, around 5.45 million addresses accumulated 3.03 million BTC between the $64,300 and $70,800 range. Consequently, this large concentration of Bitcoin at high prices constitutes a significant supply barrier. If the price of Bitcoin continues to fall, these idiot money holders or traders may sell to limit their losses. This could eventually intensify downward pressure.

Bitcoin Addresses Overview, Source: Ali Martinez | X

For context, dumb money refers to individual or retail investors who act emotionally and are less informed about market trends. These traders are prone to panic selling during a recession. Furthermore, this liquidation trend has already been observed for Bitcoin when the price extended below $67,000.

Meanwhile, inactive Bitcoin wallets have been notably active this week. As Bitcoin Price dropped below $65,000, an on-chain analyst revealed that a single Bitcoin wallet moved 25,000 BTC in six separate transactions. Furthermore, this movement increased market anxiety.

Data from Bitcoin Spend Output Age Bands shows that this portfolio’s BTC, aged between 3 and 5 years, may be preparing for a sell-off as market sentiment turns bearish. Furthermore, the next week is critical for the crypto market. Bitcoin and altcoins are under heavy selling pressure.

Last month, Bitcoin fell 10%, while altcoins fell 20-30%. Additionally, 104,000 BTC options, worth $6.72 billion, are set to expire on Friday, June 28, 2024. With a put-call ratio of 0.52 and a maximum pain point at $ 57,000, Bitcoin price is expected to remain under selling pressure.

Read too: Crypto Market: PCE Inflation and Key Events to Shape Investor Sentiment This Week

What’s Next for Bitcoin Price?

Traders are also bracing for U.S. GDP growth rate data on Thursday and the Fed’s preferred PCE inflation data on Friday. This coincides with the significant expiration of BTC options. Furthermore, this overlap could lead to increased volatility and possible price drops below $60,000, possibly reaching $57,000.

Adding to the pressure are substantial outflows from Bitcoin ETFs, surpassing $500 million last week. Additionally, the German government has been sending large amounts of BTC from its holdings to exchanges, increasing market supply.

However, despite the ongoing liquidation, more than 87% of Bitcoin holders are still profiting. This indicates that there is room for more profit reserves, which could drive prices down even further. Market analysts believe that Bitcoin price consolidation could continue until late summer 2024. Therefore, a new bull run could begin around September, with major activity expected around the US elections.

Another important factor to note is the release of the PCE price next Friday for May. A decline in core PCE already suggests downside risks for the index. Therefore, weak retail sales may also contribute to this trend, although personal income may improve.

A positive sign is the reduction in Bitcoin exchange balances. In the last 30 days, more than 107,000 BTC have left cryptocurrency exchanges, which could lead to a supply crunch. The recent Bitcoin halving event also reduced block rewards to 3,125 BTC, limiting the creation of new BTC and helping keep supply in check.

Earlier this month, the Federal Reserve took an aggressive stance on rate cuts despite cooling inflation data. This caused a sell-off, with more than $4 billion worth of Bitcoin sold by whales and miners. However, if the Fed cuts rates, some analysts believe BTC could reach $100,000 by the end of the year.

Bitcoin price analysis, Source: Rekt Capital | X

In a post on X, popular crypto analyst Rekt Capital wrote: “Strong rejection of this Lower High resistance yesterday to precede a further drop today. Bitcoin is not yet ready to end its June downtrend. But this is still the downtrend line to watch for a breakout when Bitcoin is ready to reverse higher.” Analysis of it suggests a further downtrend for BTC in the near term.

Read too: Block CEO Jack Dorsey says Bitcoin can replace the US dollar

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