Bitcoin has recently experienced a notable downturn. With the approval of Bitcoin spot exchange-traded funds (ETF) in the U.S., the price of Bitcoin has surprisingly fallen by about $4,000, currently standing at $42,807. This decline is contrary to the optimistic expectations many had for the cryptocurrency post-ETF approval, suggesting a prevalent "sell-the-news" sentiment in the market.
Technical Analysis: Signs of a Continued Decline?
Technical indicators offer a mixed forecast for Bitcoin's immediate future. On one hand, the cryptocurrency has been consolidating within a bullish channel. The 50-day exponential moving average (EMA), marked by a red wave on the daily chart, has been a support point around $42,120.
However, the relative strength index (RSI), which measures the magnitude of recent price changes to evaluate overbought or oversold conditions, currently hovers near the mid-line. This indicates a lack of robust bullish momentum.
More troubling is the appearance of bearish divergence - the RSI forming lower highs in contrast to Bitcoin's higher highs. If Bitcoin's price breaks below the 50-day EMA, it might seek support near the bullish channel’s lower trendline, aligning with the 200-day EMA near $34,850, a low unseen since the Q4 of 2023.
Market Predictions: Diverse Opinions and Potential Scenarios
The opinions on Bitcoin's future price vary widely among market commentators. Crypto Poseidonn, for instance, anticipates a crash toward the $25,000–$30,000 range, where most recent buyers have accumulated BTC.
This scenario involves bankers buying Bitcoin from these investors, potentially establishing a new market bottom.
On the other hand, analyst Rhaonnor suggests that the market has already factored in the Bitcoin ETF rally, expecting the price to stabilize between $24,000 and $32,000.
People accumulated bitcoin for etf narrative with an average price of 30k-25k. I don't think bankers will make you a profit by paying a 50-70% premium over the price you bought.
Contrasting this view, trader il Capo of Crypto warns of a potential fall to as low as $12,000, drawing parallels to the market behavior during the 2004-2007 interest rate increases.
A Glimpse of Hope: Could Bitcoin Rebound?
Despite the current uncertainty, some analysts remain optimistic about Bitcoin's potential for a rebound.
Lucas Kiely, chief investment officer at Yield App, and Christos Makridis, founder/CEO of Dynamic AI, predict that Bitcoin's price could climb towards $50,000 or even $60,000 in the coming weeks. They suggest that while a minor pullback is likely, it won't be significant. They further speculate that post-June, following the halving event, Bitcoin's value might see a substantial increase.