Bitcoin Value Dips Amid ETF Outflows and Market Shift towards Altcoins, Yet Bullish Trend Predicted
Summary:
Bitcoin's value decreased by 2.30% on June 21st, marking its lowest level in over a month due to outflows from spot ETFs in the US and diminished BTC market dominance. The Bitcoin Dominance Index also dropped, signaling a shift by many investors from Bitcoin to other cryptocurrencies. This trend of decline is predicted to continue with the possibility of Bitcoin hitting the lower trendline under $60,000 by month-end. However, the long-term trend remains bullish, with a potential surge to $72,000 and a target of $88,000 by July or August.
Bitcoin (BTC) underwent a 2.30% decrease, dipping to $63,500 on 21st June - the most significant low in more than four weeks. A sequence of outflows from Bitcoin's immediately traded funds (ETFs), coupled with a notable reduction in BTC market dominance as other cryptocurrencies gained ground, prompted this dive.
Shortly after a series of outflows from American-based spot ETFs, Bitcoin's value marked the downward trend. Nearly $500 million have been withdrawn from these investment vehicles since June 10. The ETF outflows happened along with the U.S. dollar's ascendency over major international currencies, indicating a growing investor aversion to risk. This shift followed mixed macroeconomic data from the United States and lowered chances of rate cuts by the Federal Reserve - shifting from a potential four cuts to just one in 2024.
A scenario where interest rates go higher lessens the relative gain of holding more volatile assets like cryptocurrencies. The developing atmosphere of investor cautiousness has weighed on Bitcoin values in recent times, including the present.
The current dip in Bitcoin corresponds to its diminishing stake in the crypto market. The Bitcoin Dominance Index (BTC.D), a gauge of BTC's market value against other cryptocurrencies, was down by 0.55% at 55.14% on 21st June, continuing its descent from a three day peak of 56.29%. In essence, many investors are exiting the Bitcoin market, transitioning their investments to other cryptocurrencies. This shift becomes more evident following the U.S. Securities and Exchange Commission's (SEC) decision to halt its probe into Ethereum, the leading alternate cryptocurrency by market value.
According to a CoinShares weekly report, institutional investors are shifting their capital from Bitcoin-based funds to alternative cryptocurrencies, especially Ether(ETH). CoinShares notes that investor caution, marked by $621 million Bitcoin fund outflows, also drove $1.8 million inflows to alternative cryptocurrencies.
The current Bitcoin decline potentially points to a larger corrective phase within its ongoing bullish trend. Based on the rules of technical analysis, this trend typically resolves when the price ascends, overcoming the upper trendline, matching the magnitude of the previous upward move. As of 21st June, BTC's value was retreating after hitting the upper limit of its bullish trend, possibly falling further toward the lower trendline under $60,000, potentially by month's end.
Despite the prevailing downward trend, Bitcoin still tends to tilt towards a bullish outlook. If this plays out as expected, it should breach the trendline of the bullish pattern, touching around $72,000, and potentially aiming for $88,000 by July or August. Please note that this article does not offer any investment advice or recommendations. Investments and trading moves carry inherent risks, and it is advised that readers conduct independent research when making decisions.
Published At
6/21/2024 4:22:24 PM
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