Bitcoin BTC Could Potentially Drop to 60K This Week Heres the Reason
Bitcoin is facing a significant amount of selling pressure, as the Federal Reserve has hinted at maintaining higher interest rates for a longer period than expected. This has resulted in a substantial outflow of $620 million from Bitcoin investment products last week, with Bitcoin ETFs suffering heavy losses.
Looking ahead, let’s examine the potential movement of BTC in the upcoming weeks.
Realized Price Analysis
During these turbulent times, on-chain data indicates that Bitcoin is nearing the “Realized Price” of short-term holders, which holds historical significance for BTC. Julio Moreno, the Head of Research at CryptoQuant, discussed how this metric tracks the average price at which short-term holders (those who purchased within the past 155 days) acquired their coins.
The Realized Price serves as a crucial level for Bitcoin’s price action, acting as support (green circles) or signaling an 8%-12% correction (red circles) if the price falls below it. If this correction occurs, the price could potentially drop to around $60,000.
Historical Importance of Realized Price Retests
Retests of the short-term holder Realized Price have been pivotal for Bitcoin historically. Moreno’s analysis shows that in the past two years, Bitcoin’s price has interacted with this level several times. Instances where Bitcoin found support (marked with green circles) led to a rebound and continued bullish momentum. However, failing to hold this level (marked with red circles) resulted in declines ranging from 8% to 12%.
Market Sentiment and Possible Causes
Henrik Andersson, the Chief Investment Officer at Apollo Crypto, suggested that waning interest in spot Bitcoin exchange-traded funds could be contributing to the market’s downturn. Despite a relatively calm weekend where Bitcoin hovered around $66,000 before reaching over $67,200 on Monday, a sharp sell-off brought it back down to $64,000. A slight rebound has placed it near $66,000 at present.
The market’s response to this level will determine whether Bitcoin finds support and rebounds or faces further declines, potentially dropping to $60,000. The ongoing selling pressure, influenced by macroeconomic factors such as Federal Reserve policies and investor sentiment towards Bitcoin ETFs, continues to shape Bitcoin’s short-term outlook.