Bitcoin Traders Set Sights on $50K Following Breach of Crucial Support Level
Bitcoin’s value experienced a decline of 3.84% in the past 24 hours, reaching $58,291.31 on May 1. On-chain data from CryptoQuant, as reported by Cointelegraph, indicates that this drop is due to a combination of decreased enthusiasm among dedicated investors and an increase in bearish speculation.
In April, demand from long-term Bitcoin holders, who typically buy and hold without selling, dropped by 50%. The number of BTC held by these investors fell from over 200,000 in late March to around 90,000 by the end of April. This decline in holding behavior is similar to what was seen in early March when Bitcoin experienced a 7% correction after reaching all-time highs.
The report also highlights a slowdown in demand for spot Bitcoin ETFs and an increase in short positions in the futures market as contributing factors to the recent price downturn. Traders are showing hesitation in taking extensive positions, with sell orders surpassing buy orders.
Furthermore, Bitcoin’s funding rate has reached its lowest level of the year, indicating that traders are less inclined to finance long-term engagements. This hesitance is reflected in the increase in short position activities as traders anticipate further declines in Bitcoin’s value.
According to analysts from CryptoQuant, these corrections in the Bitcoin market are often driven by a decrease in demand from large investors, also known as whales. The recent trends suggest a cautious or bearish outlook among these significant stakeholders, which is affecting overall market sentiment.
Market analysts predict a prolonged decline in Bitcoin prices, with experts expecting unprecedented lows in the coming months. Scott Melker, a respected market analyst, sees the current financial turbulence as a temporary moderation within a larger bullish trend. He believes that Bitcoin’s price could potentially reach around $52,000 in the near term.
Tuur Demeester, another prominent Bitcoin analyst, notes that Bitcoin is currently trading at $60,409. With the critical support level of $60,000 breached, Demeester suggests that the next significant threshold could be $50,000. This aligns with the broader market sentiment that anticipates further declines.
Additionally, trader and analyst Mags emphasizes the importance of weekly closing prices. If Bitcoin closes below $60,000 on the weekly chart, Mags warns of a potential significant retracement. According to his analysis, this could drive Bitcoin’s price down to $40,000 or even lower.
Tags: Bitcoin (BTC), BTC Analysis
