Bitcoin Experiences Price Correction Amid Geopolitical Tensions and High US Interest Rates
Summary:
Bitcoin (BTC) has seen a correction of 13.65% a month after hitting a record high of around $73,800. Analysts attribute the correction to geopolitical conflicts in the Middle East and a robust US economy, both influencing higher US interest rates. Traders are now wary of whether the upcoming 2024 Bitcoin Halving will cause a price slump or trigger a significant rebound. Evidence of falling demand from major institutions due to potential market instability contributes to a possible further decline. However, some analysts predict a potential BTC bull run, supported by data from CryptoQuant, noting strong Bitcoin accumulation amid price dips.
Nearly a month after reaching an all-time high of approximately $73,800, Bitcoin (BTC) has experienced a correction of 13.65%. As at April 17, the BTC/USD pair is valued as low as $62,622, with the lowest point in the month hovering around $62,160.
Increasing geopolitical tensions in the Middle East have hastened Bitcoin’s price correction. Conversely, a thriving US economy has led to expectations of sustained higher interest rates, which has diminished the allure of riskier investments like Bitcoin.
As the 2024 Bitcoin Halving nears, the question remains: will the BTC price experience another slump or will it rebound sharply?
Bitcoin’s inability to surpass its record high three times within a 30-day period indicates the precariousness of traders at these record levels. This unrest often prompts profit-taking or intensified selling pressure, putting a halt to further growth.
Such price trends are indicative of a triple-top technical pattern, which features three consecutive peaks at nearly identical price levels and two minor pullbacks in-between.
Technically, a triple-top pattern usually resolves when the price dips below its support level by an amount equivalent to the peak height above that support. As at April 17, Bitcoin is teetering on closing below its triple-top support level close to $63,500.
If this occurs, its downside target for April or May amounts to around $54,650 - a decline of nearly 14.25% from its current price levels. Alternatively, if this doesn’t occur, the BTC price will likely rebound to the upper trendline of its current trading range, close to $70,000.
Growing concerns for Bitcoin's downside are informed by the renowned Wyckoff method as analyzed in a recent post by Stockmoney Lizards. As observed, Bitcoin's recent price flux resembles the trends usually seen during the formation of a Wyckoff Distribution Model.
According to the analysis, as at April 17, the cryptocurrency had entered the "sign of weakness" stage in the pattern. This indicates reduced demand, setting the stage for a potential price drop, spurred by risk aversion due to the Federal Reserve's sustained interest rate policy and the growing Iran-Israel conflict.
Further evidence of waning demand has been noted by Stockmoney Lizards who argue that large institutions have currently halted their Bitcoin purchases due to an anticipation of an unstable market ahead.
Despite these indications, a segment of the Bitcoin market still holds out hope for a potential prolonged BTC bull run in the coming months. For example, analyst Christopher Inks refers to a developing Adam and Eve pattern to justify a bullish reversal prediction, suggesting that if this pattern plays out as expected, BTC price may surge to $75,000.
Similarly, data analytics platform CryptoQuant observes that Bitcoin's withdrawals from exchanges have reached their highest since January 2023, suggesting strong accumulation amid the price dips.
Despite the weakening market sentiment over the past month, numerous traders are optimistic that Bitcoin may steer clear of a significant price crash.
Published At
4/17/2024 1:47:02 PM
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