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Bitcoin could collapse further: Here is the only condition for a trend reversal!

Thu 20 Jun 2024 ▪ 3 min of reading ▪ by Luc Jose A.
Getting informed Trading

The storm continues to batter the bitcoin market, with massive spot ETF outflows shaking investor confidence. Within a week, nearly $879 million have left bitcoin funds, casting doubt on the future stability of the primary crypto. According to experts, a key factor could reverse this worrying trend.

Bitcoin : Voici la seule condition pour une reprise

Bitcoin Collapse: Key Numbers to Know

In recent days, bitcoin has experienced a notable decline, oscillating between $65,500 and $64,000. This instability is largely attributed to net outflows of US spot Bitcoin ETFs, which reached nearly $300 million in just two days. Since the beginning of last week, these net outflows have totaled $879 million. The largest single outflow was recorded by Fidelity’s FBTC fund with $175 million, followed by Grayscale Investments’ GBTC fund with $65 million.

This selling trend among institutional investors intensified after the Federal Reserve adopted a more restrictive stance than expected. As a result, the price of bitcoin has dropped 6% over the past seven days, shaking investor confidence. Derivatives traders have also suffered losses, with liquidations nearing $32 million over the past 24 hours, including $20 million in long positions.

Bitcoin Trend Reversal: Keys to a Potential Recovery

According to a note from the BRN trading desk, a bitcoin trend reversal could occur if ETF inflows surpass outflows. Currently, the trend is more towards selling, which continues to put pressure on the price of bitcoin. BRN also points out that Donald Trump’s pro-mining stance could benefit American miners, particularly with the adoption of more energy-efficient equipment.

Bitcoin miners have also felt the pressure, selling their holdings to fund their operations and upgrade their equipment. The decrease in miner reserves, combined with a drop in hashprice and hashrate, suggests a reduction in overall mining power. BRN analysts note that if bitcoin falls below the $64,000 mark, it could trigger a premature bear market.

The bitcoin market is at a critical juncture, with massive ETF fund outflows and prolonged selling pressure. Investors remain cautious, watching for a potential catalyst for a trend reversal. Future developments will depend on miners and governmental policies. For now, the market remains volatile, and caution is advised for investors.

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Luc Jose A. avatar
Luc Jose A.

Graduated from Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I committed to raising awareness and informing the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. Every day, I strive to provide an objective analysis of the news, decipher market trends, relay the latest technological innovations, and put the economic and societal issues of this ongoing revolution into perspective.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.