- Bitcoin price is forming a falling wedge pattern on the 8-hour time frame amid ongoing profit booking and heightened volatility.
- JPMorgan anticipates a larger sell-off, saying BTC is still overbought despite the ongoing correction.
- Halving is out around four weeks, expected to kick-start the next bullish cycle, but the bank anticipates even more selling thereafter.
Bitcoin (BTC) price is suffering the implications of bearish sentiment related to a slow down in spot BTC ETF flows. As the influence of this fundamental continues to wane and with the halving coming in a few weeks, investment bank JPMorgan says the market should brace for even more sell offs.
Also Read: Bitcoin Weekly Forecast: BTC may have recovered, but is it out of the woods?
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Bitcoin price is still shedding with the dump now going into two full weeks. Analysts ascribe this to ongoing outflows, an outcome that continues to spell bearish sentiment in the market. For instance, BlackRock, the issuer of the GBTC spot BTC ETF, had recorded nearly $13 billion in outflows year-to-date as of March 21. This marked the biggest outflow among over 3,400 US-listed ETFs.
$GBTC getting a ‘second wind’ of outflows, $1.4b this week along, now double any other ETF in outflows YTD and have set record for cumulative outflows for any ETF in history. All that and they STILL rank 3rd overall (out of 3,400 ETFs) in annual revenue generated. https://t.co/HitMwpu7dR
— Eric Balchunas (@EricBalchunas) March 21, 2024
Meanwhile, American multinational financial institution JPMorgan anticipates an extended fall in Bitcoin price, adding that BTC is still overbought even as the dump continues. Speaking to a news site, Nikolaos Panigirtzoglou, an analyst and managing director at JPMorgan, attributed the dump to profit booking. Panigirtzoglou added that this could continue into the halving event, which now stands around 32 days away, according to NiceHash.
One of Nansen’s analysts, Aurelie Barthere, told FXStreet that the firm’s risk management indicators turned risk-off last week, signaling at least a pause in the BTC rally.
“Our main scenario is that this is likely a consolidation in the crypto bull run and not the end of it,” said Barthere, adding, “The arguments in favor of this scenario are: crypto and other risk assets are now out of the way, with a re-pricing (one less Fed rate cut in 2025) now having digested The FOMC meeting. If this scenario materializes, BTC is likely to revisit all-time highs. The proximity of the BTC halving is of course also helping.”
BTC call-put spread
While JPMorgan anticipates even more profit booking post-halving, Barthere said, “The data we will watch is the release of the US March 2024 CPI report on April 10.”
Bitcoin price remains in a downtrend amid increasing bearish calls among investors. While it continues to hold above the ascending trendline, the market is strongly leaning toward the downside, and BTC price could extend the fall.
The Relative Strength Index (RSI) is moving below the 50 mean level and has crossed below its signal line (yellow band), denoting a bearish stance. The Awesome Oscillator is also in negative territory, accentuating the bearish thesis.
Increased profit booking could see Bitcoin price extend the fall, with a slip below the trendline clearing the clog for BTC to test the support at $60,840. In a dire case, the slump could extrapolate for a liquidity sweep before a potential recovery.
BTC?USDT 8-hour chart
On the other hand, if buyers come in at current levels, Bitcoin price could start recovering. While shattering the upper boundary of the wedge pattern would be a good sign, overcoming the $69,000 threshold would be the sounding bell that could draw in more buyers.
If the bulls manage to push Bitcoin price above the $70,080 resistance level, the next logical move would be to clear the $73,777 peak before a possible foray beyond $74,000.
