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Bitcoin Faces Potential Correction Amid Whale Sell-Offs and Altcoin Surge

Bitcoin Faces Potential Correction Amid Whale Sell-Offs and Altcoin Surge
CryptoQuant shares key Bitcoin (BTC) price support to avoid major correction, amidst whale sell-offs and institutional interest in altcoins.

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Bitcoin (BTC) has been facing bearish trends recently, driven by increased selling pressure from large holders, or "whales." Despite this, the total crypto market cap has rebounded above $2.4 trillion as Bitcoin stabilized above $61,000. This stabilization comes amidst heightened speculation in the altcoin market, particularly with the anticipated listing of spot Ethereum (ETH) ETFs in the United States, which has placed additional pressure on Bitcoin holders.

Institutional investors, led by firms such as VanEck, have begun diversifying their crypto portfolios towards altcoins, with VanEck recently filing for a Solana ETF. This shift has resulted in a gradual reversal pattern in Bitcoin dominance, potentially triggering the expected altseason. As more institutional money flows into altcoins, Bitcoin’s market position faces increasing challenges.

Bitcoin’s price has been hovering around the lower boundary of its horizontal macro channel for the past several days. After rebounding from below $59,000 earlier this week, Bitcoin has consolidated above $61,000 without establishing a clear direction. Historically, Bitcoin has rebounded from the $60,000 level multiple times over the past four months, suggesting a potential rally toward $66,000 in the coming weeks.

Despite the potential price rally, traders are cautioned to remain vigilant if Bitcoin’s price falls and consistently closes below $56,000. This caution is based on the Metcalfe Price Valuation Bands, which suggest that a drop below this level could lead to a significant market downturn.

The broader cryptocurrency market remains uncertain, with increased midterm pessimism. More than two months after the fourth Bitcoin halving, Bitcoin has yet to exhibit the anticipated parabolic rally. Based on historical performance, popular crypto analyst Mags on the X platform predicts that Bitcoin’s price could reach $200,000 in the coming quarters.

The market dynamics are also influenced by the accumulation of Bitcoin by US-based spot ETFs after a period of selling pressure. The demand for Bitcoin and other digital assets remains high among institutional investors and retail traders, partly due to unfavorable monetary policies from central banks.

The upcoming United States elections are expected to foster bullish sentiments in the crypto market. Additionally, anticipated interest rate cuts in the United States will likely drive more investors towards Bitcoin and altcoins, supporting the ongoing macro bull run.