Bitcoin’s price is declining due to persistent selling pressure. Despite a promising start in August, the coin is now struggling as sellers remain strong.

The current price action is at the lower end of the consolidation range, with support levels around $56,500 and $58,000.

Decline in Profitable BTC Holders: Dominant Players

With Bitcoin’s value dropping, fewer investors are profiting at current rates. An on-chain analyst noted a 25% decrease in profitable BTC holdings, with nearly 5 million BTC at a loss.

These losses may impact price stability, especially if most of these holdings are controlled by short-term holders who tend to sell during price declines.

Long-term holders, on the other hand, could provide support to Bitcoin’s price if they remain steadfast in their holdings.

Bitcoin Liquidity and Active Addresses Declining

The Exchange Liquidity Ratio for Bitcoin is reported to be “very low,” indicating low liquidity levels within the market. Traders are cautious and hesitant to engage at current rates.

Liquidity levels are expected to remain low until a significant market shift occurs. Falling prices may lead to increased volatility and further reduce liquidity as traders await clearer market trends.

Additionally, a decrease in active addresses on the Bitcoin mainnet suggests waning investor interest and engagement in the market.