What’s Next For Bitcoin Prices After Their Latest Pullback?
Analysts weighed in on what’s next for bitcoin prices after their latest drop. (Photo illustration … [+]
Getty Images
Bitcoin prices suffered some notable losses today, repeatedly approaching $60,000 and dropping to their lowest value in several weeks.
At the time of this writing, the digital currency was trading close to $61,300, according to figures from CoinMarketCap.
After these latest declines, what’s next for the digital currency? Several experts weighed in, commenting on the cryptocurrency markets and offering technical analysis.
These latest price movements materialized a few days before the upcoming 2024 halving, which is set to take place two days from now and will see bitcoin’s rate of new supply drop to 450 units per day instead of the current 900.
If demand remains steady, or even increases, it will place upward pressure on the digital asset’s price, potentially fuelling notable gains.
In spite of these bullish factors, bitcoin prices have declined recently, a development that some analysts have interpreted as being a result of market participants “buying the rumor and selling the news” surrounding the halving.
Going forward, several market observers highlighted key levels of support and resistance that traders should watch out for.
Tim Enneking, managing partner of Psalion, spoke to this matter.
“At this writing, the key question is will $60k seriously fall?” he stated via emailed comments.
“We last wicked down to this level in early March – and actually very briefly broke $59k before immediately recovering and putting in the ATH less than 10 days later. For that and other reasons, there is a lot of support at $60k and just under,” stated Enneking.
“But if $58k falls (and I have a sneaking suspicion it will), the next real support is just above $52k,” he said.
Enneking shed further light on his outlook for the digital currency, speaking to key developments that could affect its price.
“Given the roughly two-quarter slump we’ve seen after each of the prior three halvings, I would suspect that we’ll see the same thing this year – with the one wild card being the US spot ETH ETF decision by the SEC, probably on May 7. If another set of crypto spot ETFs is approved, the drop after the ATH will probably be less and shorter than after any of the prior three halvings,” Enneking predicted.
Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, also singled out the $60,000 price level.
“Bitcoin had a massive rally in the last 6mo, before consolidating between the highs of just under ~$74,000 and ~$60,000. This consolidation range will be important to watch, as a strong break through either of those numbers could suggest continued momentum in either direction,” he stated via emailed comments.
“If it breaks the highs, we will be in uncharted territory and will have to watch round numbers like $90,000 and $100,000. Investors tend to favor round numbers and sell orders tend to pile up to take profits,” Sifling noted.
“On the downside break, it would be important for Bitcoin to stay above $50,000 if it wants to continue to hold it’s bullish momentum,” he added.
When asked whether this price level was the one that traders need to watch if the cryptocurrency breaks through current support, Sifling said “Yes, the $50,000-$52,000 range was the last major support level that was established in February of this year.”
“This was also a prior resistance level back in September and December of 2021.”
Sifling also offered some input on the key variables that might pique the interest of cryptocurrency market observers in the coming weeks and months.
“After the halving, I don’t believe there is another major catalyst that Bitcoin investors are watching,” he stated.
“I would assume that people will keep a close eye on ETF flows. Hearing about institutional investors or countries around the world adding to Bitcoin could be some potential positive news in the future.”
“Investors will also keep a close eye on macro factors, such as Powell lowering rates, which could induce the market into a risk-on behavior which can be favorable for Bitcoin and crypto as a whole,” Sifling noted.
William Noble, who currently serves as director of research and content development for Emerging Assets Group, also weighed in, offering some technical analysis.
“Bitcoin has just established a square trading range for March and April. This range feels similar to the one back in February,” he stated.
The chart below helps illustrate the aforementioned trading range.
Bitcoin’s square trading range
William Noble
“Bitcoin broke out from that square range and it could very well breakout from this one,” said Noble.
“The breakout could be very sharp because BTC pressed through the bottom of the square on 4/17,” he noted.
The technical analyst noted that if bitcoin presses through the bottom of the square range, the key support levels that market observers should watch for are $60,700 and $57,700.
“If that turns out to be a ‘false breakdown’ technical analysis theory states that there could be a sharp upward movement and a breakout above the top of the square.”
“The reason for the potential breakout is simple. Bitcoin has just pressured or liquidated all buyers since February 24,” he stated.
“Leveraged players and late retail buyers have likely been forced to sell or sold out of fear. Once people realize that all the bearish ‘catalysts’ are nothing more than a temporary distraction, bitcoin can move higher in dramatic fashion.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.
