Bitcoin has been hovering around $66,000 for the past five days, with signs pointing to nervous investors as BTC investment products experience outflows exceeding $600 million.
Market analysts suggest that Bitcoin could potentially revisit the $60,000 mark, with a possible decline to $48,000 if breached. However, a resurgence in altcoin activity might provide a lifeline for the leading cryptocurrency.
After reaching above $70,000 a week and a half ago, Bitcoin has struggled to maintain its momentum, remaining stagnant around $66,000. Concerns arise as analysts fear a potential retesting of support levels at $60,000, prompting investors to contemplate profit-taking to mitigate further declines.
At the time of writing, BTC is trading at $65,700, marking a 1.45% decrease over the past day, with a daily high of $66,852. Trading volume has surged by 58% to $20.1 billion following a weekend dip.
Since dropping below $67,000 last Wednesday, Bitcoin has failed to break through this resistance level, hitting a low of $65,100 over the weekend, the lowest since early May.
As is typical with Bitcoin dips, mentions of selling and profit-taking have spiked in the past week, as indicated by data from Santiment. The market intelligence platform suggests a potential bounce-back and buying opportunity if fear, uncertainty, and doubt (FUD) persist among small traders.
Julio Moreno, head of research at on-chain analytics firm Crypto Quant, highlighted the critical nature of BTC hovering around traders’ realized price. A breach below this level could lead to an 8-12% decline, potentially pushing Bitcoin down to $60,000.
Adding to Bitcoin’s woes are spent output age bands, which assess the duration of time that BTC has been held before being sent. Notably, 40% of the BTC sent in the past week was held for three to six months, while 20% fell within the six to twelve-month range, creating selling pressure according to Crypto Quant.
Furthermore, institutional outflows from the Bitcoin space have intensified, with data from CoinShares revealing a $621 million decline in institutional investments last week. Grayscale Bitcoin spot ETF (GBTC) alone lost $273 million, while Ark and Fidelity each saw losses of around $150 million. Although most altcoin funds saw inflows, Bitcoin funds suffered significant outflows.
Despite the bearish sentiment, some analysts, including one known as Jelle, with a substantial following, remain optimistic, viewing the current market turbulence as a typical consolidation phase that historically precedes significant Bitcoin gains.