Bitcoin Could Drop To $52,000 If Price Breaks Below This Mark
Amidst the ongoing fluctuations in the cryptocurrency market, the price of Bitcoin has surged by 1.7% in the past 24 hours, hovering above the $62,000 mark.
However, recent warnings from CryptoQuant, a leading crypto analytics platform, suggest that Bitcoin could face a significant downturn to $52,000 if specific key levels are violated.
This cautionary note comes amidst growing uncertainty in the Bitcoin derivatives market, with derivative traders showing unprecedented caution compared to previous halving cycles.
Bitcoin Risky Level
CryptoQuant’s analysis highlights declining open interest and funding rates in the Bitcoin derivatives market, indicating a “cautious” stance among traders, particularly with the arrival of several institutional participants. CryptoQuant analyst Shiven Moodley noted:
At this halving, derivative traders exhibit far more caution than in previous instances. This season witnesses the entry of numerous new institutional players into the market.
According to the analyst, If Bitcoin’s price falls below the critical $60,000 support level, the top cryptocurrency could experience a notable correction to $52,000, signaling a potential short-term bearish trend.
Derivative Uncertainty
“If the price breaks below $60,000, we might witness a decline to $52,000 before a subsequent rise.” – By @ShivenMoodley
Full post 👇https://t.co/XSBnfexbzZ
— CryptoQuant.com (@cryptoquant_com) April 18, 2024
However, the presence of institutional Bitcoin Spot ETFs may mitigate the severity of the decline by absorbing “excess supply from liquidations” around the $60,000 support zone.
Moodley stated:
If the price breaks below $60,000, we might witness a decline to $52,000 before a subsequent rise. However, given the significant dominance of institutional ETFs, I wouldn’t be surprised if they accumulate excess supply from liquidations near the short-term support level of $60,000.
Analysts Sound Alarm On BTC’s Fragile Position
Meanwhile, crypto trader and analyst Ali has further fuelled concerns by identifying a pivotal price level for Bitcoin. Ali’s analysis indicates that if Bitcoin drops to $50,500, over $15 billion in liquidations could occur on the Binance alone.
#Bitcoin dropping to $50,500 will trigger over $15 billion in liquidations on #Binance alone! pic.twitter.com/9wQTVwprgx
— Ali (@ali_charts) April 17, 2024
Such a significant liquidation event could exert immense pressure on the market, potentially leading to further price declines and heightened volatility.
This outlook echoes recent warnings from prominent analyst Crypto Rover, who has also cautioned about a potential liquidation event affecting short holders if Bitcoin climbs back to the crucial price mark of $71,600.
Despite these concerns, some analysts remain optimistic about Bitcoin’s long-term prospects. Crypto analyst Plan B, known for his Stock-to-Flow (S2F) model, has made bullish predictions for Bitcoin’s future price movements.
According to Plan B, Bitcoin’s upcoming Halving event will serve as a central driver for price increases, with the cryptocurrency expected to surpass $100,000 this year and exceed $300,000 by 2025.
Featured image from Unsplash, Chart from TradingView
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