As a seasoned crypto investor with a few years under my belt, I’ve seen my fair share of market ups and downs. The recent bearish outlook for Bitcoin (BTC) is a cause for concern, but not entirely unexpected given the various factors at play.
Bitcoin Prognosis: The largest digital currency is poised for a further decline below $60,000 this week, according to recent price trends. Based on data from CoinMarketCap, a 4% drop to around $60,142 is expected. Simultaneously, a significant 18% uptick in trading volume may indicate heightened trader interest as Bitcoin experiences a dip.
The decreasing number of investments in Bitcoin ETFs since Monday is a sign of waning market confidence, indicated by the falling net inflow volume. If Bitcoin’s price fails to hold above the crucial $60,000 mark at the end of the trading day, sellers may gain momentum, potentially pushing the price down to around $55,000.
What’s Behind BTC Price Bearish Outlook
Bitcoin began July on an upward trajectory, with its price rising from $60,000 to challenge the resistance level of $63,000. Several influences contributed to this resistance, including the anticipated approval of Bitcoin ETFs, miner sell-offs, economic instability worldwide, and regulatory uncertainty.
As a crypto investor, I’ve noticed some significant shifts in the Bitcoin ETF market recently. Last week, there was an impressive influx of over $150 million on Friday. However, my optimism was short-lived as the trend took a bearish turn on Monday. According to SoSoValue ETF data, investors continued to withdraw their funds on Tuesday, with a net outflow of approximately $13.62 million.
The unexpected adjustment is intensifying the demand from sellers and influencing investors’ perceptions. Record-breaking ETF investments during the first quarter fueled Bitcoin’s surge to another peak price.
In contrast to recent developments, outflows have been observed to bring about unfavorable consequences for Bitcoin and the entire crypto market.
The decrease in ETF investments is reportedly coinciding with what’s being called peak miner capitulation. This occurs a few months following the Bitcoin halving event, during which miner rewards were cut from 6.25 to 3.125 BTC.
Smaller businesses engaged in Bitcoin mining are facing steep operating expenses as the cryptocurrency’s price slumps. Concurrently, these companies are offloading their Bitcoins to stay afloat. Simultaneously, an influx of miner deposits into exchanges is intensifying pressure on crucial support levels and impeding any potential recovery surge.
As a researcher examining the recent market sell-offs, I cannot overlook the influence of the global economic landscape on this trend, particularly with regards to Bitcoin’s price. Although US inflation has eased slightly to an annual rate of 4.6%, the Federal Reserve remains a considerable distance from achieving its desired target of 2%.
In spite of the bank anticipating a minimum of three interest rate reductions in the current year, it remains firm in its conservative stance. Some economists are hopeful for a reduction as early as September, while others predict it may not occur until December.
As an analyst, I would interpret this as follows: High-risk assets such as Bitcoin and stocks are sensitive to changes in interest rates. When interest rates rise, these assets become less attractive, leading investors to seek out higher returns elsewhere. Given that the Federal Reserve has signaled a hawkish stance for the remainder of the year, it is likely that these high-risk assets could continue to underperform in the long run.
Bitcoin Price Forecast: How Far Can Bitcoin’s Correction Go?
As a researcher studying Bitcoin’s price trends, I’ve noticed that a drop below $60,000 appears imminent based on the signals from the Moving Average Convergence Divergence (MACD) indicator. Moreover, a death cross pattern emerging on the daily chart may exacerbate this correction and potentially push Bitcoin down to $55,000. Traders, sensing these bearish signs, are increasingly inclined to short Bitcoin.
The black-outlined support at approximately $60,000 is essential for Bitcoin to resume its upward trend. If it gives way, the price prediction suggests a significant sell-off, potentially pushing the Bitcoin price below the 200-day EMA in black. A secondary support lies between $55,000 and $56,000, which might provide some relief but may not prevent the correction altogether, exposing areas such as $52,000 and $50,000.
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2024-07-03 19:56