Bitcoin (BTC) continued its downward trend for a third consecutive day on Wednesday, marking its poorest monthly performance since late 2022.
This decline comes as investors withdraw funds from cryptocurrencies in anticipation of an upcoming Federal Reserve interest rate decision.
In April alone, Bitcoin plummeted nearly 16% as investors cashed in on a robust rally that had earlier driven prices to over $73,000. Most recently, Bitcoin dropped to below $57,000, reaching its lowest level since late February.
Bitcoin 7-day price chart. Source: Finbold
Currently, Bitcoin’s price is 22% below its March peak of $73,803, placing it firmly in bear market territory. Despite this, Bitcoin has still gained 28% this year and is double its value from last year, largely fueled by substantial investments in new exchange-traded funds (ETFs) since January.
Crypto experts give Bitcoin insights
Analysts are offering varying perspectives on Bitcoin’s current market position. Mags, known as thescalpingpro, suggests that $57,000 area might be a critical low point for Bitcoin. According to Mags, the best scenario for bullish investors would be if Bitcoin briefly dips to $57,500 below a key resistance area, only to quickly recover before the week closes—a pattern he refers to as a potential “fakeout.”
#Bitcoin – $57,500 should be the bottom or its over ?On the weekly chart, the price is trading below the weekly support zone of $60,000.I see a lot of people calling for $50,000. The problem with this is if the price closes below the blue box, it would make the price action… pic.twitter.com/CQ9M9rNDC3
— Mags (@thescalpingpro) May 1, 2024On the other hand, Michaël van de Poppe believes that Bitcoin’s price correction is nearing its end, though he anticipates some additional declines. Poppe notes that Bitcoin has already fallen 20% from recent highs and expects further downward movement.
#Bitcoin is at the end of the correction.It's already down 20% from the highs and we'll have some more downside to happen from here.If the correction continues, then I think the green zones between $56-58K are essential to watch.#Altcoins to bounce before. pic.twitter.com/4Mu3NA1HSg
— Michaël van de Poppe (@CryptoMichNL) May 1, 2024Plan B provides a broader historical perspective, pointing out that Bitcoin’s closing price in April was $60,632, marking the last “blue dot” month of the current cycle. He highlights the average price of $34,000 during the 2020-2024 halving cycle, which is just below the $55,000 forecast made by the stock-to-flow (S2F) model in 2019.
Looking forward, Plan B anticipates that May will introduce the “first red dot,” signaling the commencement of a countdown to the next halving cycle, with the S2F model predicting a substantial rise to approximately $500,000 by 2024-2028.
Bitcoin April closing price $60,632This was the last blue dot (month 0). Average price 2020-2024 halving cycle $34k (slightly below S2F 2019 $55k prediction). May will be the first red dot, the start of the new countdown to the next halving (S2F 2024-2028 prediction: ~$500k). pic.twitter.com/BPqNy0cTUg
— PlanB (@100trillionUSD) May 1, 2024Bitcoin downturn
This recent downturn is largely due to increased profit-taking by investors who joined during the downturns in 2022 and 2023, and those in ETFs who have seen significant gains since early 2024.
On the broader economic front, although the Federal Reserve is not expected to adjust interest rates imminently, there is growing belief among investors that there might be no rate cuts throughout the year, negatively affecting interest-sensitive assets like cryptocurrencies, emerging market equities, and bonds, as well as commodities.
This sentiment is reflected in the record outflows seen this week from the ten largest U.S. Bitcoin ETFs, totaling $496 million, with a noticeable slowdown in inflows to BlackRock’s iShares Bitcoin Trust, according to LSEG data.
Despite the Bitcoin halving event last month, which typically bolsters BTC by reducing the rate of new coin creation, the price has fallen by about 15% since April 20. This decline follows a buying spree by investors ahead of the event, underscoring the high volatility and speculative nature of the cryptocurrency market.
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