After a spectacular rise to record highs, Bitcoin (BTC) is facing a reality check. A dramatic price correction has occurred over the past week, leaving investors wondering whether this is a temporary setback or a sign of a more bearish future.
The most popular cryptocurrency in the world reached 1 intraday low of $64,620 on March 17, a significant decline from the recent peak above $73,000. This decline has triggered a wave of pessimism, with analysts pointing to declining profitability and a decline in the number of daily active addresses on the network.
Bitcoin down in the last week. Source: Coingecko
A bearish shadow looms
Analysts say investor sentiment has been hurt by a series of bearish highs and failed rebounds, while selling pressure remains strong as we approach the “weekly candle close.” This sentiment is echoed by data from IntoTheBlock, which shows a sharp decline in the number of ‘In the Money’ addresses, meaning a decline in overall profitability within the Bitcoin network.
Source: IntoTheBlock
Finding support: a beacon of hope?
However, not everyone presses the panic button. Technical analysis suggests a potential support zone for buyers between $60,000 and $67,000. Popular trader Skew highlights this area as a potential turning point, while also acknowledging significant spot selling from major exchanges such as Coinbase and Binance.
$BTC Spot Market Data Thread, in collaboration @_WOO_X $BTC Binance place
Weekend spot buyer hereSpot Delivery ($72K – $74K)
Spot Question ($60K)Interestingly enough, the last bounce where selling also resulted in a pile of limit bids being quoted lower.
~Keep an eye on those bids… pic.twitter.com/3PKHyddNlv— Skew Δ (@52kskew) March 17, 2024
Bulls on the horizon: are the giants awakening?
While the immediate future appears uncertain, some analysts remain optimistic about Bitcoin’s long-term prospects. They view the current correction as a natural and healthy part of any bull run, and point to historical data in which similar pullbacks paved the way for further growth.
Related Reading: Bitcoin Crash: Dip to $65,000 Triggers Liquidation Avalanche of Over $400 Million
Adding to the flames of optimism is the potential return of institutional capital. The recent resumption of buying US Bitcoin ETFs and the prospect of significant inflows of funds from hedge funds and investment advisors in the coming months are seen as potential catalysts for a recovery.
BTCUSD trading at $68,087 on the weekly chart: TradingView.com
Thomas Fahrer, CEO of Apollo, a decentralized online cryptocurrency platform known for its comprehensive crypto ratings and analyzes of ETF inflows, echoes the sentiments regarding X.
Fahrer characterizes the current state as a “Bear Trap” and points to the resumption of buying US Bitcoin ETFs on March 18 as a potential catalyst for an upward surge in the value of X.
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Fahrer emphasizes the importance of greater institutional adoption and expects an increase in liquidity within Bitcoin ETFs, suggesting that substantial capital inflows from institutional investors have yet to occur.
The Verdict: Brace yourself for a volatile week
This week will be crucial for Bitcoin. The coming days will be a test of the cryptocurrency’s resilience and its ability to overcome the current selling pressure. If the bulls can regain control and positive sentiment prevails, a return to record highs remains a possibility. However, if the downtrend continues, Bitcoin could be in for a longer correction period.
Featured image from Pexels, chart from TradingView
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