Bitcoin Sees Selling Pressure Easing as Fed FOMC Meeting Delivers Interest Rate Cut: CryptoQuant

The decline in foreign exchange deposits and downward price pressure also comes as large investors and short-term holders realize their losses.

Analysts at research agency CryptoQuant reported that continued low selling pressure could trigger a relief rally in BTC. This upward trend could be supported by the 25 basis point interest rate cut announced by the Federal Reserve at the just concluded Federal Open Market Committee (FOMC) meeting.

Reduced selling pressure

According to CryptoQuant, BTC recovered from $80,000 on November 21 to a monthly high of $94,000 a few days ago. At the time of writing, the asset was trading around $90,000, up 1% weekly.

Bitcoin deposits on exchanges have fallen from 88,000 BTC in mid-November to 21,000 BTC today. Deposits started falling after the cryptocurrency hit an all-time high of $126,000 as major players reduced their transfers to trading platforms.

Currently, the share of total deposits from major players has plummeted from a 24-hour average of 47% in mid-November to 21% today. Furthermore, the average deposit has dropped by 36% over the same period, from 1.1 BTC to 0.7 BTC.

Incoming Rally for BTC?

The decline in foreign exchange deposits and downward price pressure also comes as large investors and short-term holders realize their losses. About a month ago, new and old whales suffered a loss of $646 million, the largest since July. This came as the price of Bitcoin fell below $100,000 for the first time. Since then, this group of investors has suffered at least $3.2 billion in losses.

On the other hand, short-term holders have been selling off assets at a negative profit margin over the past four weeks. The lowest value is -7%, while the Spent Output Profit Ratio (SOPR) hovers below 1.

You might also like:

“Historically, selling pressure diminishes when market participants realize they have incurred heavy losses,” CryptoQuant analysts explained.

If selling pressure subsides, BTC could return to the $99,000 level, which is considered the lower band of the Trader On-chain Realized Price range. This level usually marks resistance during bear cycles, alongside the yearly moving average and Trader On-chain Realized price, which are $102,000 and $112,000 respectively.