Bitcoin (BTC) Price Might Crash To $60K This Week: Here’s Why
The post Bitcoin (BTC) Price Might Crash To $60K This Week: Here’s Why appeared first on Coinpedia Fintech News
Bitcoin continues to experience significant selling pressure, influenced by the Federal Reserve’s indication of maintaining higher interest rates longer than anticipated. This environment has led to substantial outflows from Bitcoin investment products, amounting to $620 million last week. Bitcoin ETFs, in particular, have faced heavy losses.
Let’s analyze the BTC movement in the coming weeks.
Understanding the Realized Price
Amid this turbulent backdrop, On-chain data reveals that Bitcoin is nearing the “Realized Price” of short-term holders, an indicator historically significant for BTC. Julio Moreno, CryptoQuant’s Head of Research, explained in a post on X that this metric tracks the average price at which short-term holders (those who bought within the past 155 days) acquired their coins.
Notably, this Realized Price on-chain indicator represents the average acquisition cost of Bitcoin by investors. When Bitcoin’s spot price exceeds this metric, the average holder is in profit; if it falls below, loses dominance. At the same time Bitcoin’s spot price is close to the Realized Price for short-term holders, suggesting that while these investors are still in profit, the margin is narrowing.
Historical Significance of the Realized Price Retests
Historically, retests of the short-term holder Realized Price have been pivotal for Bitcoin. Moreno’s analysis highlights that in the past two years, Bitcoin’s price interacted with this level multiple times. Two instances (marked with green circles in the provided chart) saw Bitcoin find support and rebound, continuing its bullish momentum.
However, three other times (marked with red circles), Bitcoin failed to hold this level and experienced declines ranging from 8% to 12%.
Market Sentiment and Potential Causes
Henrik Andersson, Chief Investment Officer at Apollo Crypto, pointed out that reduced interest in spot Bitcoin exchange-traded funds might be contributing to the market’s downturn. However, he couldn’t identify the actual reason behind it. Whereas BTC had a relatively calm weekend, staying around $66,000, before gaining momentum on Monday, peaking at just over $67,200. However, a sharp sell-off later brought it down to $64,000, with a slight rebound currently placing it near $66,000.
Overall, the market’s reaction to this level could determine whether Bitcoin finds support and rebounds or faces further declines, potentially dropping to $60,000. The ongoing selling pressure, influenced by macroeconomic factors like Federal Reserve policies and investor sentiment towards Bitcoin ETFs, continues to shape Bitcoin’s near-term outlook.
