Bitcoin Faces Continued Bearish Pressure Amid Market Concerns

Bitcoin Faces Continued Bearish Pressure Amid Market Concerns. The Bitcoin (BTC) price is struggling this month, and analysts believe the dip isn’t over yet. Concerns about “dumb money” selloffs have risen, which could push BTC even lower. Currently, Bitcoin trades around $64,000, stagnant amid unfavorable market conditions.

Dumb Money and Bitcoin

Data from IntoTheBlock shows that about 5.45 million addresses have accumulated 3.03 million BTC in the $64,300 to $70,800 range. This large concentration at high prices forms a significant supply barrier. If Bitcoin’s price continues to drop, these holders might sell to limit their losses, intensifying the downward pressure. “Dumb money” refers to less informed retail investors who often act emotionally and panic sell during downturns. This selloff trend has been noted for Bitcoin when its price dropped below $67,000.

Increased Activity in Dormant Wallets

This week, dormant Bitcoin wallets have been notably active. An on-chain analyst revealed that a single Bitcoin wallet moved 25,000 BTC in six separate transactions as the price dipped below $65,000. This movement has added to market anxiety. The Bitcoin Spend Output Age Bands data shows that BTC aged between 3 to 5 years in this wallet could be gearing up for a selloff as market sentiment turns pessimistic.

Market Conditions and Future Predictions

The coming week is critical for the crypto market. Bitcoin and altcoins are under heavy selling pressure. Over the past month, Bitcoin has fallen by 10%, while altcoins have dropped by 20-30%. Additionally, 104,000 BTC options worth $6.72 billion are set to expire on Friday, June 28, 2024. With a put-call ratio of 0.52 and a max pain point at $57,000, Bitcoin’s price is expected to remain under selling pressure.

Traders are also watching for the U.S. GDP growth rate data on Thursday and the Fed’s preferred inflation data, the PCE inflation data, on Friday. These coincide with the significant BTC options expiry and could lead to increased volatility and potential price drops below $60,000, possibly even hitting $57,000.

External Pressures on Bitcoin

Adding to the pressure are substantial Bitcoin ETF outflows, exceeding $500 million in the past week. Additionally, the German government has been sending large amounts of BTC from its holdings to exchanges, increasing market supply.

Despite the ongoing selloff, over 87% of Bitcoin holders are still in profit. This indicates room for further profit-booking, which could drive prices down further. Market analysts believe that Bitcoin price consolidation may continue until the end of summer 2024. A new bull run might begin around September, with major activity expected around the U.S. elections.

Key Economic Indicators to Watch

Another key factor to watch is the PCE price release next Friday for May. A decline in core PCE suggests downside risks for the index. Weak retail sales may also contribute to this trend, though personal income could see improvement.

Positive Signs and Long-Term Outlook

One positive sign is the reduction in Bitcoin exchange balances. Over the last 30 days, over 107,000 BTC have exited crypto exchanges, potentially leading to a supply crunch. The recent Bitcoin halving event also reduced block rewards to 3.125 BTC, limiting new BTC creation and helping keep supply in check.

Earlier this month, the Federal Reserve took a hawkish stance on rate cuts despite cooling inflation data, causing a selloff with over $4 billion worth of Bitcoin sold by whales and miners. However, if the Fed cuts rates, some analysts believe BTC could reach $100,000 by the end of the year.

Analyst Opinions

Popular crypto analyst Rekt Capital wrote on X, “Strong rejection from this Lower High resistance yesterday to precede extra downside today. Bitcoin isn’t ready to end its June downtrend just yet. But this is still the downtrend line to watch for a break once Bitcoin is ready to reverse to the upside.” His analysis suggests a further downtrend for BTC in the short term.

Conclusion

Bitcoin’s price faces significant downward pressure, with analysts predicting more declines. Market conditions and economic indicators will play crucial roles in determining BTC’s near-term future. Investors should stay informed and be prepared for potential volatility as the market navigates through these challenges.

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