Bitcoin Is Rapidly Falling in Price. What Will Happen To the Price Next?
Bitcoin continues to fall under the pressure of major players. While market participants are in panic, experts are making predictions about the future price of the main cryptocurrency.
Why Bitcoin is Falling?
Over the past 24 hours, the price of Bitcoin has fallen below $54,000. The daily low was formed at $53,717, according to CoinMarketCap. The last month was marked by a precipitous 24% drop for Bitcoin. The pressure on the main cryptocurrency is exerted by several factors.
Managers of the bankrupt Mt. Gox exchange officially confirmed that they are starting payments to customers affected by the 2014 hack. It is worth noting that 10 years ago, Mt. Gox was subjected to a large-scale hack in which fraudsters withdrew 850,000 Bitcoins from the exchange. Years of litigation led to the development of a compensation payment plan, which Mt. Gox has only now begun to implement.
Over the past 24 hours, Mt. Gox has transferred Bitcoins totaling $2.7 billion to a new address. Although many experts had previously said that the Mt. Gox payments would put minimal pressure on the Bitcoin price, traders seem to have succumbed to the general panic, which was one of the reasons for the fall in the price of the main cryptocurrency.
Investors are also worried that Joe Biden may drop out of the 2024 election. They believe that the Democratic Party will replace Biden with a candidate with a tougher stance on cryptocurrencies. And the Fed has hinted that it is not yet ready to ease its monetary policy. Officials indicated in minutes released Wednesday that they do not intend to cut interest rates until additional data shows inflation is moving steadily toward the 2% target.
On Thursday, analyst firm Arkham Intelligence noticed that the German government continues to sell off Bitcoin. It has sold off 3,000 Bitcoins worth an estimated $175 million dollars. Interestingly, a German official urged the government to stop selling off Bitcoin for concern about the impact on the market.
In addition, Bitcoin miners continue to face financial difficulties after the halving. Most of the miners are forced to sell off their stocks, which puts additional pressure on the price.
Experts' Opinions and Predictions
The drop to a low of $53,717 has caused alarm among investors and market analysts. Many believe that the worst is yet to come for Bitcoin. Analysts at 10x Research predicted a drop to $50,000 in the coming weeks, a key support level where the bull/bear standoff will intensify.
A more pessimistic forecast was made by analyst Miles Deutscher. He expressed his dissatisfaction with the prolonged pressure on the price and suggested that the German government and Mt. Gox should get rid of their holdings sooner so that the price could fall to $48,000 and then start a steady rise.
Another analyst under the nickname Dave the Wave noted that Bitcoin has broken through the critical support level at $56,500. The level at $48,000 could provide the necessary support, according to the analyst.
In addition, more than 18,300 Bitcoin options expire today. And experts warn of a further sell-off. And Andrew Kang, co-founder of Mechanism Capital, expressed serious concerns about the emerging dynamics in the market. He predicted a drop to $40,000, which could significantly hurt the market and require several months of downtrend before a reversal to growth is possible.
There are also those who see the latest price drop as a buy signal. The founder of Core Scientific, expressed a bullish stance on the future of the cryptocurrency. Darin Feinstein emphasized that the market has yet to see the true value of Bitcoin and called for attention to the technology itself. He remains optimistic and sees such drops as a buying opportunity, citing the cyclical nature of Bitcoin's price behavior.
Expert Julio Moreno sees an important support level at $56,000, after which the price can begin to recover. Otherwise, Bitcoin may continue its downward correction.
The founders of analytics platform Glassnode are voicing a more optimistic outlook despite the current market sentiment. They maintain their targets for Bitcoin at the level of $110,000. Glassnode views the current dynamics as a retest of the last all-time high. In that case, bitcoin will once again have to fight for the $64,000 and $70,000 levels for further sustained growth.
Technical Analysis
The sharp drop in the price of Bitcoin over the past 24 hours has caused market-wide liquidations totaling over $665 million dollars. Bitcoin accounted for the majority of these liquidations: $222 million dollars. Of that amount, $181.8 million was due to long positions.
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At the time of writing, the asset has started to recover and has risen to the $55,000 level. An important support level remains at $56,000. If the bulls manage to break through it, it could send the Bitcoin price up to $58,000, $60,000 and higher. Bitcoin could also test $61,500.
On the negative side, if traders fail to keep Bitcoin at $55,000, it could fall to the psychological $50,000 level and further to $42,000 and $40,000.
This is not a 100 percent statement. The cryptocurrency market is very volatile and unpredictable. Investors should be cautious in their decisions and remember the importance of doing their own research.
