The price of Bitcoin (BTC) is under much downward pressure. BTC is currently trading at about $64,000 and is staying unchanged due to the adverse market conditions. However, economists worry that ignorant money may encroach on and drive down the price of bitcoins.
Bitcoin vs. Dumb Money
3.03 million Bitcoins have been accumulated by about 5.45 million addresses between the prices of $64,300 and $70,800, according to statistics from Into The Block. Therefore, a substantial supply barrier is formed by the massive concentration of Bitcoin at these prices. These holders or foolish investors may decide to sell if the bitcoin price keeps falling to reduce their losses. This might make the downward pressure stronger.
In this context, individual or retail investors who behave emotionally and have limited knowledge of market movements are called “dumb money.” During a slump, panic selling may occur among these traders. Furthermore, Bitcoin’s selloff tendency was previously observed when the price fell below $67,000.
However, this week, we have seen a noticeable increase in activity for idle Bitcoin wallets. An on-chain analyst discovered that a single Bitcoin wallet transferred 25,000 BTC in six different transactions when the cryptocurrency’s price fell below $65,000. Furthermore, this movement heightened the market’s nervousness.
According to the Bitcoin Spend Output Age Bands data, the BTC in this wallet, which ranges in age from three to five years, may be ready for a selloff as market sentiment becomes more negative. Moreover, the crypto market will face significant challenges in the coming week. Cryptocurrencies like Bitcoin are facing intense selling pressure.
While cryptocurrencies have declined by 20–30% during the last month, Bitcoin has decreased by 10%. Furthermore, on Friday, June 28, 2024, 104,000 Bitcoin options with a total value of $6.72 billion are scheduled to expire. Selling pressure is anticipated to persist on the Bitcoin price, which has a put-call ratio of 0.52 and a maximum pain point of $57,000.
What Will Be The Price Of Bitcoin Next?
Additionally, traders are getting ready for the US GDP growth rate data on Thursday and the PCE inflation data, which is the Fed’s favored inflation measure, on Friday. These fall on the same day as the big expiry of BTC options. Furthermore, this overlap may result in higher volatility and possible price declines below $60,000, perhaps even reaching $57,000.
Significant withdrawals from Bitcoin ETFs, exceeding $500 million in the last week, add to the strain. Additionally, the market supply has increased due to the German government’s large-scale transfers of Bitcoin from its holdings to exchanges.
Still, over 87% of Bitcoin owners are profitable despite the current selloff. This suggests that there is potential for additional profit-booking, which could result in even lower pricing. According to market observers, the consolidation of the price of bitcoin can last until the end of the summer of 2024. As a result, a fresh bull run may start in September, with the US elections predicted to spark significant activity.
Watch out for the PCE price release for May on Friday of next week. The index is already at risk of a fall due to a decline in core PCE. Thus, while personal income may increase, poor retail sales may also factor in this tendency.
The decline in Bitcoin exchange balances is one encouraging indicator. Over 107,000 BTC have left cryptocurrency exchanges in the previous 30 days, potentially creating a supply shortage. In addition to reducing block rewards to 3.125 BTC, the most recent Bitcoin halving event also limited the generation of new BTC and assisted in controlling supply.
Despite declining inflation readings, the Federal Reserve adopted a hawkish posture on rate decreases earlier this month. Due to this, there was a selloff, with miners and whales selling almost $4 billion worth of Bitcoin. Nonetheless, other analysts predict that Bitcoin may hit $100,000 by the end of the year if the Fed decides to lower interest rates.
Famous cryptocurrency analyst Rekt Capital stated in a post on X that there was “strong rejection from this Lower High resistance yesterday to precede extra downside today.” The June decline in Bitcoin is still ongoing. But until Bitcoin is prepared to turn to the upside, this is still the downtrend line to watch for a break. According to his estimate, Bitcoin is expected to continue its short-term decline.
