Bitcoin has been hovering around $66,000 for the past five days, sparking anxiety among investors as BTC investment products experience outflows of over $600 million.
Experts suggest that BTC may revisit $60,000, and a breach could result in a drop to $48,000. However, a resurgence in altcoin activity could potentially rescue the leading cryptocurrency.
After reaching above $70,000 ten days ago, Bitcoin has struggled to maintain its momentum and has been stagnant around $66,000 in the last week. Analysts are concerned that Bitcoin might test its support level at $60,000, as market data indicates nervousness among investors who are contemplating profit-taking to safeguard against further declines.
At the time of writing, BTC is trading at $65,700, reflecting a decrease of 1.45% over the past day. It reached an intraday high of $66,852, with trading volume surging by 58% to $20.1 billion following a weekend dip.
Since dropping below $67,000 on Wednesday, Bitcoin has failed to gain momentum to surpass this resistance level. Over the weekend, it hit a low of $65,100, the lowest since early May.
In line with historical trends, mentions of “selling” and “taking profit” have surged in the past week following Bitcoin’s decline. However, Santiment, a market intelligence platform, suggests that a temporary bounce and buying opportunity may emerge if fear, uncertainty, and doubt (FUD) persist among small traders.
Julio Moreno, head of research at on-chain analytics provider Crypto Quant, highlighted that Bitcoin is currently near a crucial level known as the traders’ realized price. This level typically acts as support for the cryptocurrency and a drop below it could potentially lead to an 8-12% decline, pushing BTC to $60,000.
Crypto Quant also points to spent output age bands as adding pressure on Bitcoin. This metric evaluates the duration for which spent BTC was held by the sender, with 40% of the sent BTC held between three and six months, and 20% held between six and twelve months. These holdings are expected to create selling pressure in the market.
Furthermore, CoinShares’ data reveals a significant capital outflow from the Bitcoin sector over the past week. Institutional investments dropped by $621 million, marking the highest weekly outflow since March. Notably, Grayscale Bitcoin spot ETF (GBTC) lost $273 million, with Ark and Fidelity each losing around $150 million. While most altcoin funds saw net inflows, major Bitcoin funds experienced substantial losses that outweighed the inflows.
Despite the bearish sentiment, some analysts view the recent market movements as typical turbulence. One analyst, known as Jelle, remains optimistic, stating that sideways price action is a normal part of market cycles and historically sets Bitcoin up for significant gains in the future.