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What to Expect from Bitcoin (BTC) This Week
Dan Burgin
How much can the BTC price drop during this cycle?
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Last week, Bitcoin plunged over 10.5% to around $57,000. At its lowest, BTC hit $53,550, driven by fears of a market crash due to Mt. Gox’s ongoing refund of over 140,000 BTC to its customers, as well as BTC liquidations by the German government.
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The entire cryptocurrency market has lost over $170 billion in combined market capitalization in a 24-hour period, according to data from CoinGecko. This marks the market’s transition into a feeling of extreme fear.
Despite the weekend trading, Bitcoin bulls managed to recover some of the lost ground, with the latest daily close at $58,250, just below the desired $58,450 level.
Sentiment was also hampered by signs the German government is selling off seized Bitcoin. Germany continues to sell Bitcoin, signaling a potential plan to liquidate parts of its reserves. Arkham, which tracks Germany’s Bitcoin portfolio, noted that the government still holds over 40,000 Bitcoins worth over $2 billion.
Bitcoin’s daily RSI reading is close to the oversold level of 30, which suggests a potential reversal or slowdown in the current downtrend, suggesting a possible bounce.
Bullish signals
A key piece of information to consider is the expectation of interest rate cuts in the United States. As job growth continues to slow, the Fed is eager to cut rates to stimulate the weak labor market. Lower interest rates are generally bullish for Bitcoin and other riskier assets because they make traditional safe havens less attractive.
Another important indicator is the resumption of inflows into US-based spot Bitcoin ETFs after two consecutive days of outflows, with spot Bitcoin ETFs seeing their largest net inflows in a month, totaling $143.1 million.
However, cryptocurrency analyst Willy Woo points out that it is difficult to predict price action based on these numbers, as BTC futures have flooded the market.
Hashrate also fell 7.7%, hitting a four-month low of 576 EH/s after hitting an all-time high on April 27. This decline suggests that some miners are scaling back operations, reflecting financial stress within the post-halving mining community.
These metrics signal that the Bitcoin market may be nearing its bottom, similar to previous cycles where miner selloffs and operational reductions preceded market rallies.
Price Analysis
Historical market cycles have shown that the Bitcoin halving event, which reduces the supply of new Bitcoin, has always preceded a period of price expansion lasting 12 to 18 months before producing a cycle peak.
The last halving took place on April 19th of this year, so those historic times have yet to pass. Analyst Peter Brandt highlighted a significant bearish pattern: the bear flag. Brandt also marked $44,000 as a potential price floor.
This pattern indicates potential further declines for Bitcoin, and Brandt’s chart visually depicts this bearish trend, urging investors to pay attention.
According to Ali Martinez, BTC needs to rise to $61,000 to revive the uptrend, as it currently has no support levels.
About the author
Dan Burgin
Dan is a news editor and writer with 12 years of experience in finance and emerging technologies, with a strong focus on cryptocurrency. Covering a wide range of topics from fintech startups to artificial intelligence, he provides an in-depth overview of the current state of the cryptocurrency market, along with insights into its potential for future disruption.