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Highlights
- Bitcoin tumbles to $65,000 triggering losses across the crypto market.
- Long-term holders shift to distribution as new capital flows in from new investors.
- Bitcoin price mirrors previous bull market tops as steady recovery becomes elusive.
Bitcoin price prediction: BTC and the crypto market are back in the red, clawing back last week’s accrued gains. In the last 24 hours, the largest cryptocurrency extended its down leg, dropping by more than 6% and testing support at $65,000.
Major altcoins like Ethereum (ETH), Binance Coin (BNB), and Solana (SOL) gasping for air, down 6.5%, 5%, and 8% respectively. If immediate rebounds fail to occur on Tuesday, more losses will engulf the crypto market whose total cap has fallen by almost 6% to $2.6 trillion, CoinMarketCap data shows.
Bitcoin boasts the largest cap of $1.29 trillion amidst a 6% drop in 24 hours. Intriguingly, a 74% increase in the trading volume to $45 billion suggests traders are more willing to short BTC than buy the dip, at least for now.
Bitcoin Price Prediction As Positive Crowd Sentiment Soars
Blockchain data by Santiment points to a noticeable increase in positive crowd sentiment as Bitcoin plummets to test the $65,000 support. The crypto space is experiencing an influx “of words like buy, buying, bought, and bullish,” igniting prospects of an immediate rebound.
“Historically, the best dip buy opportunities occur when the crowd consensus is showing a bit of fear toward a further drop. This usually results in small wallets dropping their bags for whales and sharks to scoop them up,” researchers at Santiment said via a statement on X.
Based on the four-hour chart Bitcoin price has since the beginning of the year tended to make quick trend reversals following market dips. Hence, investors have been quick to jump on the dips using various dollar-cost averaging (DCA) strategies to maximize returns and in the process trigger bouncebacks.
📉 #Bitcoin has seen a drop to $66.4K, and #altcoins have shed much more of their market caps as prices have continued their concerning retracement to kick off April. However, the crowd is staying quite strong and showing confidence toward the prospects of a quick rebound.
The… pic.twitter.com/tbGmtmTNIb
— Santiment (@santimentfeed) April 2, 2024
Related blockchain data from Glassnode revealed that long-term holders are concentrating on the distribution of their holdings by “selling to new investors at higher prices.”
This trend, to a large extent, highlights the injection of fresh capital into Bitcoin, which eventually tends to raise the realized cap to new levels. The new capital influx implies that investors have a long-term bullish outlook for BTC price.
As the #Bitcoin Spot Price consolidates below the new ATH of $73k, the Long-Term Holder cohort has entered their distribution phase, selling to new investors at higher prices.
This represents an injection of new capital into the asset class, driving the realized cap up to new… pic.twitter.com/gGECO2oyyt
— glassnode (@glassnode) April 2, 2024
Why Bitcoin Depends On The 200-day EMA Support For Recovery
Bitcoin continues to form a series of red four-hour candles below the $70,000 mark, adding credence to the short-term bearish outlook. On top of the sell signal flaunted by the Moving Average Convergence Divergence (MACD) indicator, a notable decline can be expected if losses overshoot the 200-day Exponential Moving Average (EMA).
A death cross pattern brought to light with the 50-day EMA (line in red) and the 20-day EMA (line in blue) reinforces the bearish grip. Bitcoin price also trades significantly below the previous day’s open and this is also a bearish signal.
Support at $65,000 must hold to keep further declines at bay.
However, if broken, investors can anticipate BTC to sweep through liquidity at $64,000, the grey marked zone — not forgetting $62,000 and $60,000 are also within reach.
An indexed Bitcoin price performance chart by Glassnode starting in April 2021 around the previous all-time high and according to the firm’s analysts is “where the bear market sentiment set in,” BTC has approached its peak, with similarities to previous circles in 2020 and 2018-21.
If we index the #Bitcoin price performance (black) since the April 2021 ATH (where we argue bear market sentiment set in), we can see a remarkable similarity to the prior cycle (blue).
By both duration and distance from the April 2021 peak, the market is in a near identical… pic.twitter.com/mOGfSF6apG
— glassnode (@glassnode) March 28, 2024
That said, investors must tread carefully even as the Bitcoin halving approaches. While Bitcoin price is expected to rally exponentially after this event, price corrections are also anticipated, especially with sell-news narratives taking precedence.
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