It is predicted that Bitcoin will fall again! Analyst: 10 major reasons why it may fall back to 55,000
Bitcoin fell to around $58,000 last week. Although it later rebounded, analysts at cryptocurrency research institution 10x Research are still not optimistic about the recent trend.
The following are 10x Research’s top 10 reasons why Bitcoin may fall back to $55,000 (the original text is long, the following content is compiled and compiled):
Analytical models show a downward trend
According to the price model of 10x Research, Bitcoin has recently completed a double top pattern and entered a downward trend. Funds may increase short positions, particularly during periods of declining volatility or low volatility. As of June 28, Bitcoin’s realized volatility was just 30%.
Weekly and monthly indicators peak
The weekly relative strength index (RSI) reached its peak in early March. Although Bitcoin currently remains above $60,000, the RSI has declined; the monthly stochastic indicator (KD indicator) has also repeated its previous peaks, such as January 2018 and 2021 May of the year.
Image source: 10x Research
10x Research: Ten reasons why Bitcoin could fall back to $55,000
Political Factors
The outcome of the U.S. presidential debate seemed to favor Trump, and Biden's performance sparked rumors within the Democratic Party that he would be replaced. If Biden withdraws from the race and potential replacement Gavin Newsom takes over, Trump's chances of winning may decline.
ETF demand weakens
While Bitcoin spot ETFs saw significant net inflows ($12 billion) from early February to mid-March, new inflows since mid-March have been only $2.2 billion. With the exception of arbitrage funds, demand for ETFs used for asset allocation or diversification has been muted.
The U.S. Federal Reserve may not cut interest rates
Despite the weakening U.S. economy, labor market data remained stable and inflation was stickier than the Fed expected. Fed Chairman Jerome Powell will likely want to keep interest rates high and hope to keep inflation under target.
The third quarter is usually the weakest quarter
The third quarter of each year (July, August and September) is the weakest quarter, with returns averaging just 5% over the past 13 years. In comparison, returns were better in the second quarter (64%) and the fourth quarter (62%). Based on seasonal weakness, Bitcoin is more likely to fall in August and September, with a possible pullback over the next three months.
Stablecoin inflows stall
Stablecoins are an important source of liquidity, and stablecoin inflows have stalled since Bitcoin’s halving, possibly due to underperformance of altcoins. Unless stablecoin inflows resume (additional issuance), liquidity pools will not expand and cryptocurrency traders should not expect further gains in Bitcoin.
Miners may continue selling
Bitcoin miners are likely to sell heavily near $60,000, which is close to the average break-even point for miners. If Bitcoin falls below this point for an extended period of time, miners may be forced to lose money to clear their inventories. After $LUNA coins hit zero in 2022, Bitcoin plummeted from $30,000 to $20,000 because miners were forced to liquidate, and $30,000 is the average total cost for miners. After the halving, the cost to miners becomes $60,000.
Ethereum outperforms Bitcoin
Ethereum has outperformed Bitcoin since there were rumors that an Ethereum spot ETF might be approved and listed. Historically, cryptocurrencies have often been bought on rumors and sold on facts, and this has been proven in multiple events in the past.
Impact of option expiration
$10 billion worth of Bitcoin and Ethereum options expired on June 28, with Bitcoin holding near $60,000 at the time. After options expire, Bitcoin will move more freely as the next tranche of options has less open interest and the delta hedging impact of market makers is reduced. Support at $60,000 is likely to be held by those buying call options, but once the options expire, a new range could be set lower.
Wave Theory: Bitcoin is in its third wave
Despite Bitcoin’s recent poor performance, Ledn Chief Investment Officer John Glover remains optimistic about the market. He believes that inflationary pressure in the United States in the fall will drive Bitcoin prices higher, and expects the SEC to officially approve the listing of an Ethereum spot ETF by the end of the summer.
Based on the Elliott Wave Theory, Glover believes the market is most likely in a third wave right now. According to the wave theory trend, the third wave will allow Bitcoin to experience a deeper correction to gain greater upward momentum.
Glover said:
“I believe Bitcoin will reach $85,000 to $95,000 by the end of the year, but I don’t think there will be a bullish catalyst in the market until the SEC approves an Ethereum spot ETF.”
Source: Blockworks
Bitcoin wave theory: currently in the third wave
[Disclaimer] There are risks in the market, so investment needs to be cautious. Analysts' opinions are for reference only. Users should refer to more diverse indicators to judge whether to invest and consider whether any opinions, views or conclusions in this article are consistent with their specific circumstances. Invest accordingly and do so at your own risk.