Bitcoin’s bullish run seems to have hit a snag. The world’s leading cryptocurrency is experiencing significant selling pressure, leaving investors wondering – is this just a minor dip, or are we heading into a deeper downturn? Let’s dive into the factors contributing to Bitcoin’s recent slide and what analysts are predicting.
Bitcoin Under Pressure: Slipping Below $66,000
Bitcoin (BTC) continues its downward trajectory, recently dipping another 1% and edging closer to the critical $65,000 mark. As of now, the BTC price is hovering around $65,685. This represents a 5% drop over the past week, and the overall market capitalization has shrunk to just under $1.3 trillion.
Interestingly, despite the price drop, trading activity has surged. The daily trading volume has skyrocketed by a massive 125%, exceeding $35.7 billion. What does this mean? Increased trading volume during a price decline often suggests heightened market volatility and potentially increased selling pressure.
Why is Bitcoin Breaking Down? The 50-DMA and Key Support Levels
Bitcoin’s recent price action has seen it fall below a crucial technical indicator – the 50-day moving average (DMA). For those unfamiliar, the 50-DMA is a widely-watched metric that represents the average closing price over the past 50 days. Falling below this level is often seen as a bearish signal, indicating a potential shift towards a short-term downtrend.
This drop to a one-month low signals a significant test of Bitcoin’s immediate support levels. But what’s fueling this downward pressure?
Federal Reserve’s Stance and ETF Outflows: A Double Whammy?
One major factor weighing on Bitcoin is the stance of the US Federal Reserve. Recent hints from the Fed suggest that interest rates may remain higher for longer than initially anticipated. Higher interest rates generally make riskier assets like Bitcoin less attractive compared to traditional investments offering fixed returns.
Adding to the pressure are significant outflows from Bitcoin investment products. Last week saw a staggering $620 million in outflows, with Bitcoin ETFs bearing the brunt. This trend appears to be continuing this week. On Monday, June 17th, all nine US spot Bitcoin ETFs collectively experienced outflows of $208 million.
Data from LookonChain reveals that:
- Fidelity’s FBTC saw outflows exceeding $80 million.
- Grayscale’s GBTC recorded outflows of over $60 million.
🚨 Bitcoin ETF Net Outflow Alert! June 17, 2024
All 9 spot Bitcoin ETFs experienced a net outflow of $208 million today!
• $FBTC: -$83M
• $GBTC: -$62M
• $ARKB: -$30M
• $BTCO: -$18M
• $BITB: -$10M
• $HODL: -$4M
• $IBIT: -$1M
• $BRRR and $EZBC: $0Since the US spot Bitcoin ETFs were approved,… pic.twitter.com/lookonchain/status/1802717525219889262
— Lookonchain (@lookonchain) June 17, 2024
Is More Downside on the Horizon for Bitcoin? Analyst Weighs In
To get a better understanding of what might be next for Bitcoin, let’s turn to insights from popular crypto analysts. Rekt Capital, a well-known market observer, points out that Bitcoin is currently struggling to break out of a defined trading range of $60,573 – $71,524. This range can be considered a “re-accumulation range,” where market participants are potentially accumulating or distributing Bitcoin.
According to Rekt Capital’s analysis:
- Bitcoin has repeatedly faced rejection at the higher end of this range ($71,524).
- Each rejection has pushed the price deeper within the range.
- To enter a parabolic upward phase, Bitcoin needs to decisively break above $71,350.
However, the current struggle to even surpass the lower high of $67,183 suggests that resistance is becoming stronger at progressively lower levels. This indicates that sellers are becoming more aggressive, willing to sell at lower prices during any price rallies.
As highlighted in the chart, even the $67,200 level, which previously acted as strong support in March, is now failing to hold. The rebound from $67,200 this time around was noticeably weaker, and the weekly close below this level confirms its weakening support. Analysts are now suggesting a potential further drop towards $63,800 as a possible next target.
$BTC Weekly Close below the blue level (~$67200) confirms blue level as weaker support than it was in March
Thus, $BTC could now revisit the bottom of its Re-Accumulation Range (black)
Which is ~$60500
Though $BTC could find support at ~$63800 (green) in the meantime#BTC pic.twitter.com/t31P966Fv3
— On-Chain College (@OnChainCollege) June 17, 2024
Disclaimer: The information provided is not trading advice. Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.