The price of Bitcoin collapsed after breaking the technical threshold of $60,000, generating great discontent among the crypto public. Are these drops a buying opportunity?
Bitcoin’s price fell below the price range it had remained in recent weeks, creating an unusual climate of fear that has rarely been observed among Bitcoin investors in recent months.
Can Bitcoin’s recent drops be seen as a buying opportunity or do they represent the beginning of the end for the decentralized world?
BTC/USD: a technical analysis
On a technical level, the price of BTC/USD has remained stuck for weeks within a well-defined price range between $60,000 and $72,000. These are two important technical levels and also relevant from a psychological point of view. In recent weeks, demand has remained strong at the $60,000 price point, despite it being the highest price in recent years.
Likewise, a supply wall was formed between $70,000 and $72,000, hindering the growth of BTC prices. After breaking the $60,000 level on the downside and then recovering from it, many believed that BTC was finally preparing for a new upward cycle. However, after returning close to the relative high of $67,000, Bitcoin slipped into a whirlwind of selling that quickly took the price below the $60,000 level.
- BTC/USD - 1D
- Source: baha.com
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The reasons behind the collapse of Bitcoin
The uncertainty linked to the 2024 halving, awaited for more than three years by the crypto community, has generated strong indecision in the market. Although the event in itself limits supply and therefore brings about a bullish sentiment, as the halving approaches and its completion, conflicting opinions also emerge, according to which the price would have undergone a strong downsizing due to the selling pressure coming from the miners themselves, who would have found themselves in difficulty with the halving of the reward from mining.
The latter, to make ends meet, could have sold the mined BTC at lower prices. After the halving occurred, there were no major crashes in the market. Essentially, the situation seemed to be under control and, according to many, miners would in fact have no incentive to suddenly cause the price of BTC to collapse, as they would be the first to suffer losses. Despite this, the price did not hold up for long, and now there are even talks of a possible record sell-off, which seems to be concerning ETFs as well.
Fidelity Digital Assets has changed its medium-term outlook on BTC from positive to neutral, warning the crypto investing public with the release of the Q1 2024 Signals Report. According to the spot ETF issuer, Yardstick Hashrate is too high, indicating a potential overvaluation of the BTC/USD price.
| DISCLAIMER The information and considerations in this article should not be used as the sole or primary basis for making investment decisions. The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public for savings. |
Original article published on Money.it Italy 2024-05-02 09:19:10. Original title: Bitcoin, conviene comprare ora con questi ribassi?
