Bitcoin
The digital asset struggled to a bearish end to the week, as other cryptocurrencies also fell on Friday, with Bitcoin plunging after hitting an all-time high. Analysts and traders remain bullish on the outlook for cryptocurrencies, but there are still warning signs that the correction may not be over yet.
price of
Bitcoin
It fell 2% in the past 24 hours to $65,500, the largest digital asset retreating after recently trading as high as over $66,600. Bitcoin hit a record level near $74,000 last week, but has since endured a volatile selloff, dropping to the $60,000 zone at a bottom that threatens to widen the correction. Although prices have since slowed down, Bitcoin remains well below its recent highs.
“It's been a bearish week. There are signs of a bullish turn, but it's not confirmed yet,” said Rachel Lin, CEO of trading platform SynFutures. “While most of the market signs are positive, we still need to watch how this recovery plays out. In a bearish scenario, the market could cut higher highs and lower lows before the correction is complete. On the other hand, if you see a rapid rally back to all-time highs, it's safe to assume a correction is already underway.”
Analysts and traders remain largely optimistic about Bitcoin's long-term prospects, with multiple pillars of support expected.
Chief among them is the relatively stable inflow into the Spot Bitcoin Exchange Traded Fund (ETF), which was approved by US regulators in January and sparked a new wave of investor interest in cryptocurrencies. This is the driving force behind Bitcoin's 50% rise in 2024.
Advertisement – SCROLL TO CONTINUE
Broader market sentiment is upbeat
Dow Jones Industrial Average,
S&P500,
and
Nasdaq
All indexes hitting record highs this week also helped, especially on the back of the latest Federal Reserve decision to support risk-sensitive assets.
Bitcoin's impending “halving'' is another factor driving the price's rise. The issuance of new Bitcoin tokens is expected to be cut in half next month, which should tighten supply and push prices higher, especially if demand from ETFs stabilizes or recovers.
Nevertheless, market participants are wary following the recent decline in cryptocurrencies, with some warning that the correction may only be paused for now.
Advertisement – SCROLL TO CONTINUE
“The recent rally has taken Bitcoin to unprecedented heights, but the tide appears to be turning. Several key indicators indicate the market is overheating and a correction is possible. ” analysts at market intelligence firm CryptoQuant wrote in a note Friday.
Analysts cited rising trader profit margins, increased selling by large investors and signs of weaker demand from the United States, as well as worrying signs from a proprietary bull-bear market cycle indicator.
“The pricing model suggests a potential test in the range of $58,000 to $60,000,” the CryptoQuant team wrote.
Beyond Bitcoin
ether
The second-largest cryptocurrency by market capitalization fell 2% to below $3,500. Smaller tokens and altcoins were more expensive.
cardano
Hovering above the flat sky,
polygon
1% pops out onto the green. Meme coins are even more booming,
dogecoin
5% increase;
Shiba Inu
Advertisement – SCROLL TO CONTINUE
2% ahead.
Email Jack Denton at jack.denton@barrons.com.
