Preceding the Halving?
Bitcoin experienced a significant drop in price on April 2, falling to a 10-day low of $65,800. This marked a 6% decline within a 12-hour period, raising concerns about whether BTC can recover before the upcoming Halving event.
The drop in Bitcoin price can be attributed to negative performance by Bitcoin ETFs at the start of the week. On April 1, there was a total net outflow of $85.7 million from these ETFs, with Grayscale’s GBTC leading the way with a loss of over $302 million.
The decline in Bitcoin price was further accelerated by rapid liquidations in the derivatives markets. Over the past 24 hours, more than 140,290 traders have had their leveraged positions liquidated, resulting in a loss of $437.6 million. Long traders suffered the most, with losses exceeding $133.7 million.
However, despite the market downturn, Bitcoin network fundamentals remain strong, and social sentiment surrounding the cryptocurrency remains positive. This suggests that the recent decline was primarily driven by cascading liquidations rather than any fundamental issues with Bitcoin itself.
Furthermore, recent statements from Federal Reserve Chair Jerome Powell have eased recession fears and hinted at imminent rate cuts. This could potentially spark a quick recovery in Bitcoin before the Halving event on April 20.
BTC whales have also shown resilience during the market fluctuations, with a cohort of whales investing over $6.8 billion to acquire 100,000 BTC in the last 30 days. This indicates their belief in a potential rebound in Bitcoin price.
If these whales continue to hold onto their acquisitions and strategic retail traders follow suit, the bearish pressure on Bitcoin could ease in the coming days. Additionally, a positive outlook on the next Non-Farm Payrolls report could further increase bullish activity and contribute to a recovery before the Halving.
In terms of price predictions, the resilience of BTC whales and positive statements from the Federal Reserve Chair suggest a potential rebound above $70,000 before the Halving. However, it is crucial for BTC bulls to prevent further decline below the $65,000 level. If they can maintain their positions, Bitcoin could enter a recovery phase. Reclaiming the $70,000 area would also flip the market sentiment to bullish, although resistance may be encountered at the $68,000 level in the near-term.
