As a researcher with extensive experience in cryptocurrency markets, I believe that Bitcoin’s current correction is in line with previous bull market corrections but could potentially deepen and push the price down to the $50,000 mark in the near term. The depth of this correction is already greater than any previous retracement during this cycle, and it may take some time before we see a significant recovery.
The cost of a single bitcoin (BTC) has dropped approximately 21% from its record peak. This decline aligns with past bull market corrections. However, given historical trends, Bitcoin might dip further to reach around $50,000 in the upcoming period.
BTC is down 25% from its all-time high
I’ve analyzed the Bitcoin market and found that its price dropped by over 12% in the past week, reaching a level of $57,780 at 1:10 p.m. UTC. This represents a significant decrease of approximately 21.6% compared to its all-time high of $73,750, which was hit on March 14th, based on the latest data from CoinMarketCap.
According to well-known Bitcoin analyst Rekt Capital, the ongoing price correction represents the most significant pullback so far during this market cycle, as he stated in a May 1st post on Reddit.
“This current retrace is officially the deepest (-23.6%), recently eclipsing the -22.9% retrace from early 2023… Bitcoin has already eclipsed the deepest retrace in the cycle and is 13 days away from equalling the longest retrace in this cycle as well.”
The pullback is 48 days long, compared to the longest retrace of 63 days during this cycle.
During past Bitcoin surges, there have been occurrences of corrective dips akin to what we’re experiencing now. In the 2018 bull market, Bitcoin underwent five significant corrections exceeding 30%, along with an extra 29% correction, as reported by the pseudonymous trader Sister Laura in her April 30th post.
Can Bitcoin dip to $50,000 in the short term?
The crucial support level for Bitcoin was breached at around $59,000. This level held significance not only as a potential resistance point but also as the short-term holder realized price (STH-RP) or the average purchase price for spot Bitcoin ETFs.
As a crypto investor, if Bitcoin fails to hold above the $59,000 mark, I believe we might see it retesting the $50,000 level again based on Jag Kooner’s analysis as the head of derivatives at Bitfinex. He shared this insight with CryptoMoon.
“While price predictions are not appropriate based on these, the STH-RP is a crucial support level for BTC to hold and on losing it, or the average ETF buyer cost basis, there is a high likelihood that there is a cascade down to low $50,000s…”
Approximately 750 million dollars in total value from bitcoin’s leveraged long positions would be forced to be sold off across all cryptocurrency exchanges if the price of bitcoin dipped below 60,000 dollars, based on data from Coinglass.
The price of Bitcoin dipped beneath the $60,000 threshold a few days following the launch of the first Bitcoin ETFs in Hong Kong. These ETFs recorded impressive trading volumes of approximately $12.4 million on their inaugural day.
As a crypto investor, I’ve observed that the launch of the Hong Kong ETFs didn’t garner the anticipated trading volumes, despite my initial optimism. The reason being, according to James Wo, the founder and CEO of DFG, is the challenging macroeconomic conditions.
Wo told CryptoMoon:
“These ETFs were launched in different market conditions. U.S. ETFs were launched earlier this year when the market was pricing in around six rate cuts in 2024. Given the sticky inflation data, markets are now pricing in only one rate cut which saw crypto prices tumbling recently.”
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2024-05-01 18:27