Cryptocurrency Volatility Looms as Inflows into Bitcoin ETFs Slow Down
Summary:
This article explains the current volatile state of multiple cryptocurrencies due to a slowdown in inflow of funds to Bitcoin exchange-traded funds (ETFs). With an inflow of just $132 million reported on March 14, there are signs of a possible short-term reversal in Bitcoin’s rally. Other cryptocurrencies like Ether, Solana, XRP, Cardano, Dogecoin, Avalanche, Shiba Inu, and Polkadot display similar volatility. The piece advises readers to conduct personal research before investing.
A deceleration in the inflow of funds to Bitcoin exchange-traded funds (ETFs) on March 14, amounting to a mere $132 million, could be an indicator of Bitcoin's (BTC) sharp rally experiencing a short-term reversal. As notable inflows into Bitcoin ETFs largely propelled the most recent surge, a slowdown could pave the way for a remedial phase.
Historically, following halving cycles, Bitcoin has seen an approximately 40% drop as pointed out by the anonymous trader known as Bags on social media platform X (formerly Twitter). Hence, a similar situation may see Bitcoin plunging to around $45,500.
Amid the current pullback, the silver lining is that the primary trigger is hedges profit-booking, not panic selling, according to renowned trader Skew. This naturally raises questions as to whether Bitcoin and other altcoins will see a further correction or bounce back from current price levels.
Bitcoin’s price dropped as it reached $73,777 on March 14, but the dip was quickly bought up. However, the short-term sellers dominated the market on March 15 due to a significant slowdown in the upward momentum. The price now hangs around a crucial juncture, the ascending channel pattern's support line.
If the price drops lower than the channel and the 20-day exponential moving average of $65,195, it would suggest the beginning of a remedial phase. The BTC/USDT pair might consequently drop to $59,000 and then the 50-day simple moving average of $54,291. On the other hand, a rebound off the support line indicates that the pair could remain within the channel for a longer period.
Ether (ETH) also experienced a pullback after almost hitting the $4,000 mark, prompting short-term traders to secure profits. If Ether's price does manage to rebound off the $3,600 support level, there might be another attempt to push the price to $4,000. A break below this level, however, might accelerate selling, and the ETH/USDT pair could drop to $3,200 and subsequently to the 50-day SMA of $2,997.
The continuous upward momentum in Solana’s (SOL) price signifies a robust demand at elevated levels. Nevertheless, also being in the overbought territory, a correction might be on the horizon, pulling the SOL/USDT pair to the 20-day EMA of $142. A sharp selling wave exceeding the 20-day EMA could see the pair dropping to the breakout level of $126.
Other cryptocurrencies like XRP, Cardano (ADA), Dogecoin (DOGE), Avalanche (AVAX), Shiba Inu (SHIB), and Polkadot (DOT) have similarly demonstrated notable price movements indicative of the ongoing bull market's inherent volatility.
This article should not be considered as investment advice or recommendations. As all investment and trading ventures entail risk, readers are advised to carry out their personal research before making a decision.
Published At
3/15/2024 9:30:00 PM
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