Technology

Besides ETF Outflow Woes, These Circumstances Could Push BTC To $55,000 – Crypto News

Published

10 months ago

July 3, 2024

Dripp

Bitcoin price forecast: The largest cryptocurrency is on the cusp of extending June’s correction below $60,000 this week. A 4% decrease to $60,142 based on CoinMarketCap data characterizes the grim crypto landscape on Wednesday while a remarkable 18% surge in the trading volume could imply growing interest among traders as BTC dips.

The persistent drop in the Bitcoin ETF net inflow volume since Monday highlights dwindling market sentiment. Should BTC price close the day below the critical $60,000 level, pressure on the sell-side will likely surge clearing the path for a fall to $55,000.

What’s Behind BTC Price Bearish Outlook

Bitcoin stepped into July on a positive note, climbing from $60,000 and testing resistance at $63,000. The resistance at $63,000 can be attributed to various factors including Bitcoin ETFs, Bitcoin miner capitulation, the uncertainty in the global economy, and regulation.

After Bitcoin ETFs closed the week with a staggering over $150 million net inflow volume on Friday, the trend turned bearish on Monday. According to SoSoValue ETF data, investors sustained the exodus on Tuesday, with $13.62 million in net outflows.

This sudden correction is adding to the sell-side pressure not to mention impacting market sentiment. Soaring ETF inflow volumes in Q1 shaped the rally in Bitcoin price to a new all-time high.

Conversely, the trend in the last few months shows that outflows have a negative impact not only on Bitcoin but the broader crypto market.

Bitcoin ETF stats | SoSoValue

Besides the downturn in ETF flows miner capitulation is said to be at the peak. This comes a couple of months after the highly publicized Bitcoin halving, which reduced miner rewards from 6.25 to 3.125 BTC.

Small companies mining BTC are struggling with high operation costs and with price on a downtrend, they are selling their stash. At the same time, the increase in miner deposits into exchanges puts pressure on key support areas while dampening recovery momentum.

The global economic landscape is also a factor contributing to the sell-off in the market, particularly in Bitcoin price. Despite inflation easing in the US to 4.6% per annum, the Federal Reserve is still far from its target of 2%.

Despite the bank foreseeing at least 3 interest rate cuts this year, it is adamant and taking a hawkish stance. Moreover, these cuts were recently revised to one with some optimistic economists looking at September and those pessimistic at December.

High interest rates negatively impact high-risk assets like Bitcoin and stocks. Therefore, unless the Fed takes a dovish stance in the second half of the year, the macro landscape could remain bearish in the long run.

Bitcoin Price Forecast: How Far Can Bitcoin’s Correction Go?

Bitcoin’s drop below $60,000 seems imminent as signaled by the Moving Average Convergence Divergence (MACD). On top of this, a death cross pattern on the daily chart could escalate the correction to $55,000 as traders are compelled to short BTC.

Bitcoin price forecast chart | Tradingview

The support highlighted in black around $60,000 is critical for the immediate resumption of the uptrend. If broken, the Bitcoin price prediction hints at a heated sell-off below the 200-day EMA in black. The next support between $55,000 and $56,000 will come in handy but this may not stop the correction, bringing areas such as $52,000 and $50,000 within reach.

Frequently Asked Questions (FAQs)

Many analysts and experts predict Bitcoin’s rally to $100,000 during the potential 2024 bull run. However, this is not guaranteed, especially with the current bearish landscape.

Two things could take place: The first is increased selling pressure as traders short BTC, secondly, this could be an opportunity to buy the dip leading to a larger trend reversal above $70,000.

Yes. Net inflows increase demand for BTC while net outflows signify burgeoning selling pressure.