On the eve of April’s monthly close, Bitcoin (BTC) is on track to record its first month of decline since August last year. Trading just below US$64,000 on Monday night, according to data from CoinGecko, the BTC/USD pair will not have the strength to reverse the approximately 10% drop accumulated since the beginning of this month.
The current outlook has been unfavorable for cryptocurrencies and Bitcoin. Geopolitical instability continues to disrupt the market due to the uncertainties it may cause in the global macroeconomic scenario, generating more inflationary pressure in the United States.
The situation is worsened by recent data indicating that the world’s largest economy may be entering a period of stagflation – a combination of rising prices for producers and consumers with reduced or even negative economic growth.
Optimism around exchange-traded funds (ETFs) also appears to be waning. Although the April monthly close coincides with the launch of Bitcoin and Ethereum (ETH) ETFs in Hong Kong, inflows into US exchange-traded funds remain negative. Net redemptions of US$218 million and US$120 million were recorded on April 24 and 25, respectively.
Analyst Diego Consimo, founder of Crypto Investidor, adds that a new wave of regulatory FUD (fear, uncertainty and doubt) in the United States should provoke new drops in the market. The analyst emphasizes that if the $59,000 support is broken, Bitcoin could retreat to the $40,000 range.
“If we apply the same logic from previous cycles to the current cycle, we are talking about BTC seeking the range between US$48,000 and US$43,000, in a movement that meets Bitcoin’s historical pattern of correcting between 30% and 40% after the halving“, as demonstrated by the regions marked in red in the graph below.
Weekly chart of Bitcoin price behavior around the halving. Source: TradingView/Crypto Investidor
Despite the current scenario, there are optimistic perspectives
To counterbalance the market’s momentary pessimism, a research report from the North-American manager Bernstein published this Monday, 29th, states that the momentary inversion of the flows of ETFs in the United States is a natural movement after the highs recorded in March. According to the report, there is still room for growth in institutional demand in the medium and long term.
“There is a natural maturation time until Bitcoin becomes an acceptable portfolio allocation recommendation and platforms establish their compliance frameworks for selling Bitcoin investment products,” says Bernstein.
The manager maintains the forecast that the top of the current bull cycle will be reached in 2025, when the BTC/USD pair is expected to reach US$150,000.
On another optimistic note, the profile of WuBlockchain, an Asian portal specializing in cryptocurrencies, stated in a https://twitter.com/wublockchain/status/1784954267050348653?s=12&t=en7yWHtrZmE5qRIjN7cpiQ on the $125 million traded in US ETF debut.
In turn, the analyst and founder of Crypto Investidor believes that maintaining support at US$59,000 should stabilize the price of Bitcoin. Then, a period of accumulation similar to those recorded after the three previous halvings should prepare the Bitcoin price towards new all-time highs:
“If BTC enters a lateralization process above its first support and manages to break the downtrend line (LTB), currently around US$72,000, the target would be the long-awaited US$100,000.”
“Thus, May could also be “the month of reversal and beginning of Bullrun of Bitcoin”, concludes Consimo, according to the scenarios outlined in the graph below.
Annotated weekly chart BTC/USDT (Binance). Source: Crypto Investor
In line with the pessimistic outlook for the cryptocurrency market, last week digital asset investment products recorded US$435 million in withdrawals, according to a bulletin released this Monday by CoinShares. It was the third consecutive week of negative inflows.
Contrary to the trend, the funds available in the Brazilian market registered a positive balance of R$20 million in contributions, as reported by Cointelegraph Brasil recently.
Disclaimer: This is not an investment recommendation and the opinions and information contained in this text do not necessarily reflect the positions of Cointelegraph Brasil. Each investment must be accompanied by research and the investor must be informed before making a decision.
