As Bitcoin drops, liquidating leveraged long bets along the way, one analyst, in a post on X, thinks this might be a prime opportunity to accumulate, citing historical patterns of pullbacks followed by impressive recoveries.
Time To Load The Bitcoin Dip?
The analyst shared a chart indicating that Bitcoin is within historical retracement ranges. Whenever this happens, prices tend to bounce back sharply, tearing higher, much to the relief of holders.
Solid data back this assessment. The analyst said that since Bitcoin bottomed at $15,500 in 2022, there have been four distinct pullbacks, all within the -20% to -23% range. For the savvy, the trader continued, each of these downturns presented an opportunity to accumulate at a discount.
Related Reading: Shiba Inu Fees On Fire: What’s Behind The 500% Surge?
Therefore, if history aligns with this preview, Bitcoin may be available at a discount at spot rates. At spot rates, the coin is down by around 23% from all-time highs of $73,800 in mid-March.
No one knows how prices will print out in the sessions ahead. However, looking at the candlestick arrangement, BTC has resistance at the $60,000 to $61,000 zone. A clean breakout above this zone might cement the analyst’s preview, setting in motion the start of another leg out that may take out $74,000 in the coming weeks.
Shrinking Spot ETF Inflows, United States Federal Reserve Turns Dovish
Though optimism reigns, the possibility of BTC crashing below the $52,000 and $50,000 support levels cannot be discounted. This outlook, though bearish, is also backed by data.
For instance, on May 1, spot Bitcoin exchange-traded funds (ETFs) redeemed $563.7 million worth of BTC. In the past, when the coin was flying from February to mid-March, inflows were hundreds of billions.
Excitement was palpable even with Grayscale liquidating GBTC, decreasing BTC. Now that there is a marked spike in outflows, it suggests that sellers are in control and spot ETF holders panicking and looking to exit.
Despite the negative sentiment and predictions of Bitcoin melting to $52,000, another analyst remains positive. Citing the United States Federal Reserve reducing Quantitative Tightening (QT) runoff from $65 billion to $45 billion, the analyst continued that Bitcoin prices might benefit from the “dovish” environment.
Of note is that the central bank said it is unlikely to hike interest rates. Instead, they look to slash rates when supportive data is showing that inflation is falling towards the 2% benchmark level. Currently, inflation remains high but lower than the 2021 averages.
Feature image from Canva, chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Source link
Leave a Reply