Bitcoin has been hovering around the $66,000 mark for the past five days, causing some nervousness among investors as BTC investment products experience outflows exceeding $600 million.
Experts suggest that BTC might revisit the $60,000 level, and a breach could potentially lead to a drop to $48,000. However, there is hope that a resurgence in altcoin activity could rescue the leading cryptocurrency from this scenario.
After reaching a high of over $70,000 a week ago, Bitcoin has struggled to maintain its momentum and has remained around $66,000. Analysts are concerned that the cryptocurrency may test its support level at $60,000, with market data indicating that investors are on edge, contemplating taking profits to avoid further declines.
At the time of writing, BTC is trading at $65,700, marking a 1.45% decrease over the past day, with an intraday high of $66,852. Trading volume has surged by 58% to $20.1 billion after a weekend lull.
Despite attempts to break past the $67,000 barrier, Bitcoin has been unable to gather the necessary momentum. Over the weekend, it dropped to $65,100, its lowest point since early May.
Following the recent decline in Bitcoin’s value, there has been an increase in discussions on selling and taking profits. The market intelligence firm, Santiment, suggests that there may be a temporary opportunity for a bounce and buying if fear, uncertainty, and doubt (FUD) continue to dominate among small traders.
Julio Moreno, head of research at Crypto Quant, has highlighted that Bitcoin is currently teetering around a crucial level known as traders’ realized price. A breach below this level could lead to an 8-12% drop, pushing BTC down to $60,000.
Adding to the pressure on Bitcoin are the spent output age bands, which measure the duration that BTC has been held by the sender. Over the past week, 40% of BTC sent was held for three to six months, while 20% was held for six to twelve months, creating selling pressure.
Furthermore, there has been a significant capital outflow from the Bitcoin space. Institutional investments dropped by $621 million last week, with GBTC, Ark, and Fidelity experiencing substantial losses. Despite this bearish trend, some analysts remain optimistic, viewing the current market turbulence as a normal phase that could set Bitcoin up for significant gains in the future.