Bitcoin: Should We Be Worried? Possible Declines Ahead

Since the middle of last week, the propensity to buy in financial markets has slightly decreased.

Although it hasn't dropped significantly, it could theoretically be considered a small warning bell.

At this point, it is reasonable to ask whether we should be concerned about possible declines in the price of Bitcoin. Summary

• The draining of the US government
• Excessive release
• Whale holders
• Recession risk?
• Real downside risk for Bitcoin?

The Draining of the US Government

It is possible that behind this dynamic are the money movements of the US government.

However, it should be specified that the markets do not seem to be reacting to those movements, but rather to the government's statements from August.

In fact, in August, the US government declared its intention to maintain liquid reserves of about 950 billion dollars, but with the intention of bringing them down to about 800 billion between September and October.

Indeed, official data shows that as of August 31, total cash reserves in US government bank accounts were approximately 950 billion dollars or more (for example, on August 31, they were 1.023 trillion).

Starting from September 1, as previously stated, the Trump administration began to release dollars into the market, but at a much faster pace than previously declared. Moreover, the markets for Bitcoin had already priced this in since the end of August, as they were expecting it.

It should be remembered that when the US government drains liquidity from the market, part of this indirectly comes from financial markets, and a small part also from the Bitcoin market.

Excessive Release

In the first week of September alone, the US government released more than 130 billion dollars, which is almost the amount it had declared it would release over the next two months. Additionally, last week it released another 66 billion, bringing cash reserves to just over 818 billion dollars.

This release has evidently been excessive, and indeed starting from last Friday, the US government has begun to drain some of it back.

It is very likely that institutional investors/speculators were already aware of these matters, as everything was put in black and white in August, and thus they tried to anticipate the decline, succeeding in doing so.

Whale Holders

But, unfortunately, there is more.

In fact, starting from yesterday, an analysis of on-chain data shows that some whales have deposited BTC on exchanges. Generally, when this happens, it means that selling pressure has increased.

To be honest, for now, it is not a large amount of BTC, but an increase in selling pressure that occurs after a decrease in buying pressure must inevitably be considered a warning bell.

However, it should be emphasized that today is the day of the Fed's decision, so the whales speculating on Bitcoin seem to have entered a waiting phase, as they are currently very inactive.

The problem is that it now seems almost certain not only that the Fed is forced to raise rates today, but also that it will be forced to do so at least once more by the end of the year, probably in December.

The overall picture in the short term is therefore not particularly positive, and it probably isn't even in the medium term.

To all this, it should be added that after yesterday's failure, it is now very unlikely that the Clarity Act will be approved by the end of the year.

Recession Risk?

Returning to the generalized decline in buying pressure in financial markets, there is another piece of data suggesting that the problem may not be short-term.

In fact, yesterday on Polymarket, the probabilities that the US may enter a recession next year jumped suddenly from 32% to 37%. Probability of a recession in the USA in 2027 on Polymarket

This jump, along with the slight reversal of the US government's stance on the release of dollars into the market, has created the conditions for a significant reduction in the propensity to buy in financial markets.

The fact is that in recent days, this reduction has already manifested itself, but it is not yet significant. The risk that it may increase exists, although much will depend on what the Fed says today.

Real Downside Risk for Bitcoin?

There is one last potentially negative piece of data for Bitcoin.

In fact, since BTCUSD has existed in publicly open financial markets, every time presidential elections have been held in the USA, a speculative bubble, small or large, has been triggered. Instead, in the year of the mid-term elections, that is, the year after the bubble, there has always been a deep bear market.

The problem is that such bear markets have always concluded in late autumn, while that of 2026 seems to have had its bottom at the end of July.

Therefore, it is absolutely possible that in the coming weeks the price of Bitcoin may drop, also because it is currently much higher than the July bottom, and it rose too much and too quickly at the end of August.

However, it cannot be ruled out that the true bottom of 2026 may indeed be that of July (i.e., just below $58,000), and that perhaps in autumn there may simply be a double bottom.

It should be noted that starting from 2024, Bitcoin's historical cycles have not been strictly followed, and this could happen again this time. Additionally, we will need to wait for the Fed's words today to have a truly precise picture.

So a bit of short-term caution is absolutely justified, but for now, there is no clear signal of structural reversal.