As a seasoned crypto investor with several years of experience under my belt, I’ve seen my fair share of market fluctuations. The recent Bitcoin price drop below $67K has left me feeling cautiously optimistic. While the renewed buying interest and institutional support are encouraging signs, the heightened selling pressure from miners and ETF investors is a cause for concern.
As a researcher studying the cryptocurrency market, I’ve observed that Bitcoin (BTC) experienced a 1.1 percent decline over the past 24 hours, dipping momentarily below $67,000 during early trading sessions in London. This price drop comes amidst significant resistance between $72,000 and $73,000 that Bitcoin has encountered for the past four months, eliciting contrasting responses from traders.
As a crypto investor, I’ve noticed an uptick in the “buy the dip” mentality lately. This mindset, fueled by heightened calls for purchases during market dips, has drawn in a significant number of traders driven by greed and fear of missing out (FOMO). The collective anticipation is that the bullish sentiment will persist.
Additionally, the latest reduction in interest rates by the Bank of Canada and the European Central Bank has heightened the possibility of a comparable move by the Federal Reserve in the US before the end of this year.
Bitcoin Price Under Immense Selling Pressure
Based on the findings from CryptoQuant’s on-chain analysis, it appears that Bitcoin miners have been increasing their deposit of profits into exchanges at a faster pace in recent days. This trend suggests heightened selling pressure within the mining community. Approximately two months following the latest Bitcoin halving event, miners have begun cashing out their earnings more aggressively.
As a crypto investor, I’ve noticed that when miners are heavily selling their cryptocurrencies on exchanges and over-the-counter (OTC), it can be a sign of distress. This behavior is often referred to as “capitulation.” Miners rely on the profitability of their operations to sustain their business. When they’re forced to sell in large quantities, it may indicate that their costs are higher than the current market price, which could be a red flag for potential investors.
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) June 13, 2024
The selling pressure from prominent Bitcoin miners has aligned with a surge in cash withdrawals from US-based Bitcoin spot ETFs, as reported by Coinspeaker. Notably, there has been a substantial rise in the pace of cash outflows from these ETFs as investors express concerns about potential market downturns.
Is the Bull Cycle Over?
The price of Bitcoin has noticeably lagged behind that of the stock and bond markets during this quarter, implying that the optimistic perspective on cryptocurrency may be waning. However, Jurrien Timmer, head of global macro at Fidelity Investments, maintains that Bitcoin is still a formidable alternative to gold as a store of value, despite recent sluggish adoption trends.
Timmer pointed out that Bitcoin’s growth in adoption needs to accelerate in the short term for the bullish sentiment to reach new record highs. Additionally, the gap between Bitcoin’s price and its adoption rate has expanded noticeably over the past few weeks, indicating increased activity in cryptocurrency trading.
As an analyst, I’ve noticed that Bitcoin’s dominance is getting close to hitting a significant resistance point. At the same time, there’s a declining divergence occurring on its weekly Relative Strength Index (RSI) chart.
Midterm BTC Price Targets
From a technical perspective, the Bitcoin price is encountering a significant challenge as the RSI indicators on a daily and weekly basis suggest a possible decline in value. According to experienced trader Peter Brandt’s analysis, Bitcoin needs to hold its ground above the support level of around $66,000 to prevent further drops towards $60,000 and $48,000.
Chart of interest – Bitcoin $BTCSometimes the most obvious interpretations of a chart work out, most of the time the charts morph. But the most obvious is this: Break through 65,000, then mkt goes to 60,000 Break through 60,000 mkt goes to 48,000
— Peter Brandt (@PeterLBrandt) June 13, 2024
From my perspective as a crypto investor, Brandt’s theory of Bitcoin’s price reaching a cycle top due to exponential decay on a larger scale is intriguing. However, I can’t ignore the potential for a significant rally based on his Hump Slump Dump and Pump (HSDP) indicator. This technical analysis suggests that Bitcoin could easily surge to a new all-time high in the short term.
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2024-06-14 14:21