The downward momentum of Bitcoin (BTC) continues to gain strength as Bitcoin transactions begin Tuesday between $65,000 and $64,000, providing bulls and investors with an opportunity to buy the new dip.
The market still focuses on the upcoming halving event, expected to be the catalyst for the next bullish wave. Meanwhile, I believe that exchange-traded funds (ETFs) trading in BTC remain the key factor controlling the market.
From my perspective, reports indicating that BTC ETFs have garnered over $2.5 billion in net flows last week alone, attributed to institutional FOMO, could fundamentally provide a new level of buying momentum, which is the pivotal level BTC prices seek before a reversal in the medium and short term.
I believe new whales bought Bitcoin at an average price of $56,400 mostly through instant exchange-traded investment funds, while old whales, who acquired exchange-traded Bitcoin funds, entered at around $21,300.
These new TradFi whales include clients from BlackRock and Fidelity, and with different generations of whales entering the Bitcoin market at different price points, diversity in investment strategies and perspectives in the cryptocurrency space is becoming clear, making pinpointing the best buying price closer to reality.
As new investors have significantly increased their Bitcoin purchases over the past month, short-term stockholders hold only about 48% of the true value distributions in the Bitcoin market.
This increase is considered bullish for BTC but also indicates the possibility of a correction once these short-term investors decide it’s time to sell, as is happening currently.
Bitcoin is now trading at $65,500, below the all-time high (ATH) of $69,138 and at a very important pivot point. If breached, Bitcoin could decline further and extend a more severe correction. While these predictions may seem far-fetched, everyone should note that in March 2020, when BTC surpassed the previous peak of $20,000, it began a nearly 100% increase in just four weeks. Here, I believe that if history repeats itself, Bitcoin’s price could easily rise to $100,000, but not before completing the current correction.
Fundamentally, a Bitcoin decline could witness a weekly imbalance within the range of $53,120 to $59,111, where this move will liquidate late buying positions and encourage the addition of new selling positions, which could be placed once the price moves upward within the corrective downtrend. Hence, investors need to be cautious in the future.
If this occurs, breaking below a major support level at $42,000 on the weekly timeframe is required to establish a lower bottom. Considering the upward flows of exchange-traded investment funds and the overall market expectations, this scenario could remain precarious given current market conditions.
