At the time of writing, Bitcoin’s price has dropped from $64,000 to $62,000 due to a net outflow of $217 million from US listed Exchange Traded Funds (ETFs).
An analyst predicts that if the price falls below $63,300, there could be a further decline to as low as $59,000.
Since the halving event, Bitcoin’s price has remained relatively stable, staying above $60,000 and fluctuating between $62,000 and $67,000. This stability has been accompanied by significant outflows from US spot Bitcoin ETFs, with the total outflow for this week reaching $244.49 million. Notably, the Fidelity Wise Origin Bitcoin Fund experienced a drawdown of $23 million, the first since January 11. Grayscale also recorded an outflow of $417 million last week, along with a 72-day record of withdrawals.
The reason for these outflows has been attributed to US inflation data, which suggests higher borrowing costs and improved Treasury yields. This has had a negative impact on speculative assets like cryptocurrency.
Noelle Acheson, author of the Crypto “Is Macro Now” newsletter, believes that as long as the macroeconomic environment continues to support higher yields, Bitcoin is likely to experience a period of consolidation.
JPMorgan has observed a weakening correlation between Bitcoin ETF prices and inflows, with the correlation dropping from 0.84 in January to 0.60 in a recent assessment. Analyst Ken Worthington explains that a reading above 0.70 indicates a higher correlation, while a number just below it is considered “moderately correlated.”
In the last 24 hours, liquidations totaling $60 million have occurred, with $13.48 million coming from Bitcoin. Of this amount, $6.17 million were liquidated from long positions, while $7 million were liquidated from short positions.
Despite hopes of a bullish market recovery, analyst RektCapital predicts another downturn within the next two weeks. He compares the current correction to the pullback seen in 2016 and notes that Bitcoin typically experiences two corrective waves: one before the halving and one after.
However, Bitcoin is expected to maintain a strong position above $60,000 in the coming weeks and remain above the post-halving danger zone until next month. Analyst Ali Martinez has also observed a sell signal on Bitcoin’s 12-hour chart, suggesting that the price could fall to $61,000 and even $59,000 if it drops below $63,300.
In summary, Bitcoin’s price has slipped to $62,000 due to significant outflows from US listed ETFs. Analysts predict a potential further decline to as low as $59,000 if the price falls below $63,300. The correlation between Bitcoin ETF prices and inflows has weakened, and liquidations totaling $60 million have occurred in the last 24 hours. Despite these challenges, Bitcoin is expected to hold above $60,000 in the coming weeks.
