Key Points:
BTC experienced its largest pullback in a month, with the "Ghost Month" trend suggesting it may further decline to $105,000.
On-chain data shows an increase in spot demand from the U.S. and South Korea, indicating a short-term recovery.
BTC faced a significant pullback on August 14, dropping below $117,000, marking the largest decline in a month. The daily chart displayed a bearish engulfing pattern for the first time since July 15, raising concerns that the seasonal weakness associated with Asia's "Ghost Month" may continue the downward trend.
Despite the price drop, on-chain data indicates that bottom-fishing buying activity remains resilient. The Coinbase Premium Index surged to a monthly high yesterday, indicating strong spot demand in the U.S. In the Asian market, the Kimchi Premium Index turned positive, showing renewed buying pressure from South Korea.
Cryptocurrency trader Hansolar noted that collective buy orders have been distributed across various trading platforms including Coinbase, Bitfinex, and the South Korean market while analyzing market sentiment.
Stablecoin flow data further supports the bullish tone in the market. Crypto analyst Maartunn stated that since the price drop, USDC inflows to exchanges have surged to $3.88 billion, indicating that traders are actively preparing to deploy funds.
Only 16,800 BTC were transferred to exchanges at a loss by short-term holders (STHs), far below the levels seen during previous sell-offs. Previously, when BTC dropped more than 5%, short-term holders would sell over 48,000 BTC at a loss.
📊MARKET UPDATE: #Bitcoin slipped 5% on Aug. 14, but capitulation signs were muted with just 16.8K $BTC moved to exchanges at a loss from Short-Term Holders, far less than in past drawdowns. Blue arrow trend shows shrinking STH sell pressure. 👍 pic.twitter.com/sVUvRSVXj5
Anonymous analyst Exitpump pointed out that BTC may find support between $116,000 and $117,000, with order book data showing buying interest in both spot and futures in this range.
While this could facilitate a rapid price rebound, the seasonal pattern associated with Asia's "Ghost Month" has historically been accompanied by significant market pullbacks.
This year's "Ghost Month" will last from August 23 to September 21. In the Chinese lunar calendar, this marks the seventh month of the year, often viewed in Asian cultural traditions as a period that brings ominous signs. Although this phenomenon does not directly impact the market, its psychological effects on traders, such as risk appetite and profit-taking behavior, cannot be overlooked.
Historical data shows that BTC exhibits a clear selling trend during the "Ghost Month." Since 2017, the average peak decline for BTC during this period has been about 21.7%, with declines of -39.8% in 2017 and -23% in 2021.
Currently, BTC is hovering around $117,320. Based on historical average declines, the price could drop to the $105,000-$100,000 range before a substantial rebound can begin. This aligns with key technical support levels, where long-term buyers may consider entering.
Although some years' "Ghost Month" ended with positive returns on investment, volatility is generally observed during this period, meaning traders must remain vigilant. If a deeper pullback occurs in late August, it could lay the groundwork for a strong recovery in the fourth quarter, provided the resolve of short-term bulls is first tested.
Related: Galaxy Digital: If Bitcoin (BTC) reaches $1 million next year, it will signal an economic downturn.
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original: “Analyst: Bitcoin (BTC) Traders Absorb the Dips, but 'Ghost Month' Could Extend Woes”
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