Red is everywhere in the cryptocurrency market. Bitcoin (BTC), the leading digital asset, recorded a 17% monthly correction, ending a seven-month bullish streak. Last week’s 14% correction and 24-hour drop of 8% sustained, with BTC on Wednesday at $57,258.
Previous reports suggested that bitcoin price There is a possibility that the price may fall further below the $60,000 support in search of a post-halving bottom. Potential liquidity levels include $56,000 and $52,000.
Investors eyeing Bitcoin ahead of a possible 2024 bull run should consider several reasons to buy Bitcoin, including halving, ETFs, and general technical market structure. .
1. Bitcoin halving
Bitcoin's third halving occurred on April 20th. This effectively reduced the miner's reward from his previous 6.25 BTC to his 3.125 BTC per block. Halving is a process; satoshi nakamoto It is inscribed on the blockchain to ensure the continuous production of new BTC while maintaining the scarcity principle of digital assets.
With the daily production of new Bitcoins significantly reduced from 900 BTC to 450 BTC, supply will gradually become tighter. On the other hand, demand is expected to increase, creating the perfect conditions for a parabolic rise.
Aside from a temporary increase in Bitcoin price after the halving, the effects of this event occur months later, often triggering an exponential breakout to new all-time highs.
With this new half-life, Bitcoin Lifting altcoins such as Ethereum and Solana is expected to surpass $100,000. Investors looking forward to a bull market may want to take advantage of dollar-cost averaging (DCA) starting May 1. According to the paper, such a move would be encouraged given that Bitcoin is trading at a significant discount to its ATH high of $73,737. CoinGecko data.
2. Impact of Bitcoin ETF on Bitcoin price
The adoption of ETFs after their approval in January was the biggest driving force behind the Bitcoin price hitting a new all-time high. However, the bullish trend faded a few weeks before the April halving, and Bitcoin was in the hands of the bears.
As discussed on Monday, Grayscale's GBTC withdrawals increased the total daily net outflow to $81 million. Outflows slowed to $51 million on Tuesday, bringing cumulative net inflows to $11.94 billion, according to SosoValue data.
The impact of ETFs on BTC prices cannot be overstated as it improves market sentiment towards the digital asset. If volume turns green, we expect the trend to ease and trigger new buy orders from investors and traders currently on the sidelines.
As supply narrows due to half-life and demand increases, ETF, the price of Bitcoin could rise to unprecedented levels. By entering a position early, investors can maximize profits over the long term.
3. Technical outlook for Bitcoin price decline, is it a bullish signal?
Bitcoin price seems to be balancing at the height of a high cliff. With the $60,000 support that the bulls relied on since last week gone, it is only a matter of time before Bitcoin retests the next key level at $52,000.
Key technical indicators highlight a slight adjustment in the technical structure, increasing the possibility of a fall to or even below $50,000. The sell signal from the Moving Average Convergence Divergence (MACD) indicator encourages the trader to focus on shorting her BTC in the short term.
The Relative Strength Index (RSI) is near oversold at 37, indicating increased selling pressure and the possibility that more traders may choose to short BTC for short-term profits. There is.
An oversold situation also means that Bitcoin price is approaching a possible trend reversal. In other words, if you buy Bitcoin on May 1st, your position could turn into a profit right away, even if it could fall further below $60,000 in the coming days.
conclusion
The bearish outlook for the cryptocurrency market is both a blessing and a pain for many investors.people who bought it BTC Those near the top will need to prepare for winter until their assets recover. At the same time, it is also a potential time to seek exposure at discounted prices and maximize profits over the long term.
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