Bitcoin Price Struggles. It’s Had a Very Bad Week—and the Selloff May Not Be Over.
and other cryptocurrencies were weaker Friday, struggling into the end of a bearish week for digital assets as Bitcoin plunged after notching an all-time high. While analysts and traders remained bullish on the outlook for crypto, there are still warning signs that a correction may not be over.
The price of
has fallen 2% over the past 24 hours to $65,500, with the largest digital asset retreating after recently trading as high as above $66,600. Bitcoin hit a record level near $74,000 last week but has since endured a volatile selloff, dipping as low as the $60,000 zone in a trough that threatened to give way to a wider correction. While prices have since pared losses, Bitcoin remains firmly below its recent peak.
“A bearish week, which is showing signs of a bullish turn but has not been confirmed yet,” said Rachel Lin, CEO of trading platform SynFutures. “While most of the market signs are positive, we still need to watch how this bounce plays out. In a bearish scenario, the market could make a lower high and a lower low, meaning the correction will take a long time to play out. On the other hand, if we see a quick upmove back to all-time highs, then it’d be safe to assume the correction has already played out.”
Analysts and traders remain broadly upbeat about the longer term outlook for Bitcoin, which can count on multiple pillars of support.
Chief among them is relatively steady inflows into spot Bitcoin exchange-traded funds (ETFs), which were approved by U.S. regulators in January and have seen a fresh wave of investor interest in crypto, becoming a driving force for Bitcoin’s 50% rise in 2024.
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Upbeat sentiment in wider markets—with the
and
indexes all hitting records this week—also has helped, especially on the back of the latest Federal Reserve decision that supported risk-sensitive assets.
Bitcoin’s looming “halving” is another force for buoyancy. The issuance of new Bitcoin tokens is scheduled to be cut in half next month, tightening supply in what should be a boost to prices if demand—especially from ETFs—holds steady or picks up.
Nevertheless, market participants are wary after the latest crypto selloff, with some warning that the correction may just be paused for now.
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“The recent rally has seen Bitcoin reach unprecedented heights, but the tide appears to be turning. Several key metrics indicate that the market may be overheating, leading to a potential correction,” analysts at market intelligence firm CryptoQuant wrote in a note Friday.
The analysts pointed to worrying signs from their proprietary Bull-Bear Market Cycle Indicator, in addition to elevated profit margins among traders, increased selling by large investors, and indications that demand from the U.S. has dipped.
“Price models suggest a potential test of the $58,000 to $60,000 range,” the team at CryptoQuant wrote.
Beyond Bitcoin,
—the second-largest crypto by market value—fell 2% to below $3,500. Smaller tokens or altcoins were higher, with
hovering above flat and
popping 1% into the green. Memecoins were even more buoyant, with
up 5% and
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advancing 2%.
Write to Jack Denton at jack.denton@barrons.com
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