Bitcoin (BTC) has faced a notable decline, dropping by approximately 6.3% within the past 24 hours. This fall has led it to dip below the crucial $60,000 support mark, occurring late on Tuesday.
Overview of Bitcoin’s Current Situation
As of the European morning on Wednesday, Bitcoin is trading around $56,800. This marks its lowest value since February’s end. Additionally, Bitcoin is witnessing its most challenging month since November 2022.
Market Impact
The broader cryptocurrency market, as gauged by the CoinDesk 20 Index (CD20), also experienced a decline, losing nearly 9% initially, though it has since recovered some of its losses.
Market Sentiment and Influencing Factors
Cryptocurrencies, including Bitcoin, have been impacted by a risk-averse sentiment prevalent in wider financial markets. This is largely due to concerns surrounding the U.S. economy, where indications of slower growth and persistent inflation have dimmed hopes of a Federal Reserve interest rate cut. The Federal Open Market Committee’s upcoming rate decision is anticipated to shed more light on the situation.
Altcoin Performance
Ether (ETH) has dropped by about 5%, falling below the $3,000 mark, while dogecoin (DOGE) has led the decline among major altcoins with a 9% slide. Solana (SOL) and Avalanche (AVAX) have both experienced losses of approximately 6%.
Bitcoin’s April Performance
April saw Bitcoin’s value decrease, marking its first monthly loss since August. This 16% drop represents the most significant decline since November 2022, coinciding with the implosion of the crypto exchange FTX. Analysts are cautioning about potential further downward movement in the near term.
Expert Insights and Predictions
According to digital asset research firm 10x Research, selling pressure may intensify, potentially leading Bitcoin towards the $52,000 level. This assessment is based on outflows from U.S. spot exchange-traded funds, totaling $540 million since the Bitcoin halving on April 20. It’s estimated that the average entry price of U.S. bitcoin ETF holders stands at $57,300, potentially serving as a critical support level.
Markus Thielen, CEO of 10x Research, highlights the significance of this average entry price, suggesting that increased unwinding of ETF positions may occur if Bitcoin continues to trade below $57,300. This, in turn, could drive prices down further, aligning with their price target range of $52,000 to $55,000 over the coming weeks.
In summary, Bitcoin’s recent decline, influenced by broader market sentiment and economic indicators, is prompting cautious outlooks and predictions of potential further downward movement in the near term.