Bitcoin BTC -0.91% 's price briefly fell below $25,000 on Monday for the first time in almost three months amidst an erosion of confidence in the digital asset.

Not least is the anticipation amongst investors that bankrupt exchange FTX might get court approval by Wednesday to begin liquidating its remaining crypto asset holdings.

"Court documents reveal a desire to liquidate up to $100 million worth of crypto assets per week," Deutsche Digital Assets Head of Research André Dragosch told The Block. "As of April 2023, FTX possessed approximately $3.4 billion worth of crypto assets."

Of that, FTX holds roughly $560 million in bitcoin, according to a court filing.

Dragosch added that FTX's eventual liquidations could be largely priced in at the moment, although he added that there's still a "heightened uncertainty surrounding FTX's crypto holdings on 3rd party exchanges."

The bankrupt exchange’s plan to sell and hedge its crypto assets into fiat currency is scheduled to be discussed at a court hearing on Wednesday, September 13. Bitcoin's price  fell 2.2% over the past day to $25,120 at 3:30 p.m. ET, according to CoinGecko. 

Bearish indicators conspire

Dragosch underscored that the potential FTX sell-off, when combined with other indicators that are already relatively bearish, could amplify downside pressure on bitcoin. He pointed to on-chain data that showed declining bitcoin trading volume for both spot and derivative activity.

That concurs with data from The Block, which tracked the seven-day moving average of daily spot volume to having fallen below $10 billion for the first time since November 2020.

Dragosch said that perpetual and futures trading volumes continue to be comparatively low.

"BTC futures and perpetual positioning has decreased significantly, option traders are more cautious when you look at BTC options' put-call ratios," he said. "Short-term BTC traders have been realizing losses on-chain, especially during the latest sell-off at the end of August."

Another factor adding downside pressure is a possible divestment from crypto hedge funds, "who still seem to be a bit overextended based on our analyses," Dragosch said. He said a decrease in macro liquidity, largely attributed to the tightening of central bank monetary policies, was also adding a downside factor, with a continuous shrinkage in stablecoin market caps indicating there is less "dry powder" available for investing in crypto assets like bitcoin.