Bitcoin Value Drops Amid Stagflation Fears and ETF Slowdown, Analysts Predict Further Slump
Summary:
Bitcoin's value has dipped over 8% in a week and 12% in a month after reaching record highs. The lukewarm response to the introduction of Bitcoin and Ethereum (spot) exchange-traded funds in Hong Kong and increasing fears of U.S. stagflation are contributing factors. Moreover, the halt in the flow into U.S. BTC exchange-traded funds has intensified the downward pressure. While Bitcoin currently stands 17% below its peak, analysts predict it could slide as low as $42,000. Despite the current downturn, Bitcoin's correction is seen as part of the typical bull market structure, with hopes for stabilisation and recovery soon.
The value of Bitcoin (BTC) has seen a significant drop of over 8% within a week, and in the span of a month, the decrease has amounted to 12%, following the record peak it set on March 14, at nearly $73,835. According to data from Cointelegraph Markets Pro and TradingView, the Bitcoin price, which was at $64,727 on April 30, plummeted by 6.5% reaching a daily low of $60,505. With the somewhat lukewarm reception of the newly launched Bitcoin and Ethereum (spot) exchange-traded funds in Hong Kong, and increasing fears of stagflation in the U.S. market, Bitcoin's price decline seems to coincide. Furthermore, the continued stagnation in the flow into U.S. BTC exchange-traded funds is adding to the downward pressure on Bitcoin's price.
Analysts are currently discussing how the price of Bitcoin will continue to react in this current correction cycle. Predictions are hinting at a drop as low as $42,000. In the historic year of 2024, Bitcoin demonstrated a unique price trajectory, reaching record peaks before the halving occurrence, making market players question whether the leading cryptocurrency has found its ceiling. Bitcoin presently trades 17% lower than its record high and has gone down by 7% since the supply subsidiary halving on April 20. Several market observers are convinced that Bitcoin will sink into the low $40,000 range.
In a comparison to previous halving cycles, during times when Bitcoin's realized profits have been aligned with market peaks, independent trader and commentator Ali suggested that Bitcoin’s price might have hit its market cap. Glassnode data indicates that when Bitcoin reached record highs on March 14, realized profits soared to $3.52 billion. Similar levels were observed during the bull market of 2021. However, Ali will only declare a market cap when there’s a continuous and definitive fall below Bitcoin’s short-term holder's realized price. He predicts that if a market top is confirmed, Bitcoin could tumble down towards $51,530 or even $42,700.
Contrary to its usual upward trend after the halving of 2024, Bitcoin's current downturn is still considered essential in the standard bull market structure, according to independent analyst Rekt Capital. In his comparison of the current Bitcoin cycle to previous ones, the cryptocurrency's price has behaved in a similar pattern with even a slight fall below the Range Low. He believes that Bitcoin is presently going through a "Re-accumulation Range" which typically arises before and after the halving. Bitcoin currently needs to stabilize and recover after significant pre-halving price gains.
Bitcoin's price rests on immediate support from the 100-day exponential moving average (EMA) at $59,900. If this support fails, the price is predicted to plunge further, stretching the demand side liquidity towards the 200-day EMA currently standing at $51,900, indicating a potential 15% fall from current levels. This 200-day EMA is synonymous with Bitcoin’s horizontal support area between $50,000 and $52,000, which, after providing support in February, preceded a price surge of 42% leading to all-time highs.
Published At
4/30/2024 9:07:58 PM
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