As a seasoned analyst with over two decades of experience in global financial markets, I have seen my fair share of bull and bear cycles. The current state of Bitcoin (BTC) is giving me flashbacks to the Dotcom bubble of 1999-2000 – the hype, the euphoria, followed by a brutal correction.
The price of Bitcoin (BTC) remains on a downward trajectory with no immediate signs of recovery. Even experienced trader Peter Brandt agrees with this pessimistic outlook for BTC. He suggests that the ongoing bearish trend is concerning since Bitcoin is the largest cryptocurrency by market capitalization. The next two weeks in September could potentially determine if Bitcoin will sustain its upward momentum or initiate a steep drop to around $30,000
Here’s a summary of some key points about Bitcoin ($BTC)
— Peter Brandt (@PeterLBrandt) September 3, 2024
Reasons Why Bitcoin Price Could Continue its Crash
Here are 5 key reasons why Bitcoin price could crash to $30,000:
- Bearish Bitcoin price structure
Uncertain macroeconomic conditions
US election results
BTC’s bearish on-chain metrics
Bearish Bitcoin price structure
The behavior of Bitcoin’s price demonstrates a clear sign of diminishing buying enthusiasm. Consequently, Bitcoin has been forming successive higher troughs and lower peaks since it reached its record high of $73,835 in March 2024
It appears that the Bitcoin (BTC) market is showing signs of indecision, with buyers and sellers holding roughly equal ground. If this stalemate persists, there’s a possibility for a significant drop in BTC price. Potential targets could be around $43,800 to $41,350, then further down to $30,450 and finally at $27,200
Uncertain macroeconomic conditions
As a crypto investor, I experienced a significant downturn in mid-July when the Bank of Japan increased interest rates. Adding fuel to the fire, weak Nonfarm Payrolls data was published, causing Bitcoin’s price to drop by about 30% and the S&P500 index to dip by 10%. This double whammy has stirred up widespread concern about a potential economic recession
If the employment data released on September 6 falls short of predictions, there might be renewed worries about recession and related speculations. The Federal Reserve’s interest rate decision scheduled for September 18 could potentially intensify such concerns, leading to a significant market adjustment reminiscent of a Great Recession scenario in the financial markets
US election results
The mood in cryptocurrency markets has been influenced by the political landscape of the United States. For instance, when Trump was perceived as likely to win and his chances of winning the 2024 presidency seemed strong, the markets showed optimism. However, as Kamala Harris’ odds for winning improved, there was a downturn in the market due to uncertainties about crypto regulations that might be implemented by a potential Democratic nominee
If Hariss wins the election, the markets could be in for a rude awakening and could cause BTC price to crash to $30,000.
BTC’s bearish on-chain metrics
The 365-day Market Value to Realized Value (MVRV) measure follows the average profit made by Bitcoin buyers over the past year among investors. If the value is high and positive, it suggests that investors are currently in a profitable position, which might signal an approaching correction. Conversely, a low positive or negative value could suggest a potential buying opportunity for investors, as this indicator often predicts local and cycle bottoms where investments can be accumulated
As I’m typing this, the MVRV (365-day) figure hovers near zero and hasn’t dropped below that point since March 2023. It’s possible we might see more price adjustments, but such a dip could pave the way for Bitcoin to potentially fall to $30,000
Conversely, if the Nonfarm Payrolls data surpasses predictions and the Fed rate cut is not perceived as a negative sign, Bitcoin’s price might demonstrate its strength. If this happens, the bulls would need to push BTC prices to a new high above the $65,050 peak reached on August 25 and establish a lower support level above the $49,050 low from August 5
Making this move would counteract the pessimistic viewpoint. The bitcoin price forecast suggests it might trigger a rally towards $70,000 or even beyond
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2024-09-04 15:57