After a spectacular climb to record highs, Bitcoin (BTC) faces a reality check. Last week saw a dramatic price correction, leaving investors wondering whether this is a temporary setback or a sign of a more pessimistic future.
The world’s most popular cryptocurrency has reached a intraday low of $64,620 on March 17, a significant drop from its recent peak above $73,000. This setback triggered a wave of pessimism, with analysts pointing to declining profitability and a drop in daily active addresses on the network.
Bitcoin down in the last week. Source: Coingecko
A bearish shadow approaches
According to analysts, investor sentiment has been hurt by a series of downward spikes and failed recoveries, while selling pressure remains rampant as we approach the “weekly candle close.” This sentiment is echoed by data from IntoTheBlock, which shows a sharp decline in the number of “In the Money” addresses, signifying a decrease in overall profitability within the Bitcoin network.
Source: IntoTheBlock
Finding Support: A Beacon of Hope?
However, not everyone is hitting the panic button. Technical analysis suggests a potential support zone for buyers between $60,000 and $67,000. Popular trader Skew highlights this area as a possible turning point, while also acknowledging significant spot selling from major exchanges like Coinbase and Binance.
$BTC Spot market data thread, in partnership @_WOO_X $BTC Binance Spot
Weekend spot buyer hereSpot supply (US$72 thousand – US$74 thousand)
Spot demand ($60 thousand)Interestingly, the last rejection that was sold also resulted in a pile of limit bids being priced lower.
~ Keep an eye on these offers… pic.twitter.com/3PKHyddNlv– Δ Skew (@52kskew) March 17, 2024
Bulls on the horizon: are the giants awakening?
Although the immediate future appears uncertain, some analysts remain optimistic about Bitcoin’s long-term prospects. They see the current correction as a natural and healthy part of any bull run, pointing to historical data where similar pullbacks paved the way for greater growth.
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Adding fuel to the fire of optimism is the potential return on institutional capital. The recent resumption of buying in US Bitcoin ETFs and the prospect of a significant influx of funds of hedge funds and investment advisors in the coming months are seen as potential catalysts for a recovery.
BTCUSD trading at $68,087 on the weekly chart: TradingView.com
Thomas Fahrer, CEO of Apollo, a decentralized online cryptocurrency platform known for its comprehensive crypto analytics and ETF inflow analysis, echoes sentiments regarding X.
Fahrer characterizes the current state as a “bear trap” and points to the resumption of buying in US Bitcoin ETFs on March 18 as a potential catalyst for an increase in the value of X.
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Emphasizing the importance of increasing institutional acceptance, Fahrer anticipates an increase in liquidity within Bitcoin ETFs, suggesting that substantial capital flows from institutional investors have yet to materialize.
The verdict: Brace yourself for a volatile week
This week will be crucial for Bitcoin. The next few days will be a test of the cryptocurrency’s resilience and its ability to overcome the current selling pressure. If bulls manage to regain control and positive sentiment prevails, a return to all-time highs remains a possibility. However, if the downtrend continues, Bitcoin could face a more prolonged period of correction.
Featured image from Pexels, chart from TradingView
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