Bitcoin Price Plunges to Multi-Week Low amid Dampened Demand and Predictions of Further Drops
Summary:
Bitcoin's price has dipped by 5.42% to reach a multi-week low of $57,151 on May 1. According to on-chain data, the drop is likely due to decreased demand and increased open short positions in futures market. Market analysts predict further lows, with a potential drop to $52,000 or even lower. The current market conditions, however, is viewed as typical for a bull market.
In the last 24 hours, the price of Bitcoin (BTC) faced a fall of 5.42%, reaching its lowest point in weeks at $57,151 on the 1st of May. BTC's recent downturn could be a result of lessened demand and an increasing number of open short positions, according to on-chain data. This might even hint that the digital currency could face newer lows.
CryptoQuant indicates this fall to be associated with dampening demand marked by slowing growth of permanent holders' Bitcoin balances, less demand for Bitcoin ETF spots and a rise in the futures market's short positions. The company reveals that the Bitcoin demand from long-term investors, who only buy but don't sell Bitcoin, dropped by half in the month of April, going from more than 200,000 BTC in late March to around 90,000 BTC.
The demand for Bitcoin dipped noticeably in the wake of reduced purchases by U.S. spot ETFs. Furthermore, traders also began to exhibit reticence in opening long positions, leading to an influx of concerned sell orders. CryptoQuant points out that the current drop in Bitcoin prices could be due to traders expecting prices to plummet further, and therefore, opening short positions.
Debates among market players are currently revolving around how much further Bitcoin prices will fall before witnessing a reversal in trend. CryptoQuant analysts predict the lower limit to be within the $55,000 to $57,000 range. Scott Melker, a popular analyst, envisages the BTC price not to suffer beyond $52,000 within the near future. According to Melker, the current correction is consistent with bull markets, where daily RSI is yet to reveal overselling.
Bitcoin analyst Tuur Demeester informs that now that Bitcoin has lost its $60,000 support, the price might next go down to $50,000. If Bitcoin's weekly closing rate falls short of $60,000, traders worry about a steeper plunge, possibly hitting $40,000 or even lower.
Readers are advised to thoroughly research before making any investment decisions since they come with inherent risks. This piece does not include any investment recommendations or advice.
Published At
5/2/2024 12:30:00 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.