Analyst Warns of Bearish Pressure on BTC Price, Explaining Bitcoin’s Current Decline
Bitcoin’s price experienced a 6% decline, facing downward pressure due to bearish divergence. The Federal Reserve is expected to keep rates unchanged, but Japan’s recent rate hike and Grayscale’s selling pressure have added to Bitcoin’s weakness. However, this drop in Bitcoin’s price may benefit altcoins as investors seek to diversify their portfolios.
Renowned crypto analyst Michaël Van de Poppe has issued a warning to investors amidst Bitcoin’s recent downturn, indicating potential downward pressure on the cryptocurrency. Bitcoin saw a significant 6% drop on Tuesday, reaching approximately $63,400, marking its largest one-day decline in two weeks.
This decline comes amid a broader uptick in cryptocurrencies, but Van de Poppe has highlighted several factors contributing to Bitcoin’s current downward trend. He points out that the bearish divergence in Bitcoin remains valid and suggests that the correction is shallow, leading to altcoins bleeding and presenting great opportunities.
There are multiple reasons for the drop in Bitcoin’s price. Firstly, the upcoming Federal Open Market Committee (FOMC) meeting, scheduled for March 20, 2024, is expected to heavily influence the direction of the crypto market. During the previous FOMC meeting in January 2024, the Federal Reserve chose to keep interest rates steady at 5.25%-5.50%, indicating its ongoing pause in raising rates to combat inflation. The Fed has signaled that it will maintain its current rate stance until there are clear signs of inflation dropping below the 2% target.
Additionally, Japan’s central bank recently decided to end its negative interest rate policy after eight years in an effort to stimulate lending and demand. The Bank of Japan (BOJ) raised its short-term policy rate from -0.1% to a range of zero to 0.1%. However, analysts caution that the BOJ may proceed cautiously with further rate hikes due to the slow economic recovery.
Another significant event is the transition of Grayscale’s bitcoin fund into a Bitcoin Exchange-Traded Fund (ETF) on January 10, following the approval of a spot Bitcoin ETF by the SEC. As a result, Grayscale has started moving its BTC holdings to Coinbase for selling. This change allows investors to quickly liquidate their holdings and realize profits, a trend that seems to be underway once again.
Despite the downturn in Bitcoin’s price, Van de Poppe suggests potential opportunities for altcoins. A decrease in Bitcoin’s dominance could make altcoins more appealing to investors looking to diversify and grow within the crypto market.
Van de Poppe’s research continues to provide valuable insights for investors amidst these market shifts. The question remains: will you take his advice as a guiding light?