The Bitcoin market could be bracing for a $25,000 dip even in the face of a potential pivot in macroeconomic conditions, according to a recent analysis by Capriole Investments. Seemingly unresponsive to the current bull market in U.S equities, Bitcoin remains mired in its recent slump, its price now hovering around $28,868.
Given this situation, market participants are anticipating a possible drop to around $25,000 due to Bitcoin’s current technical and fundamental indicators. A series of market transformations could be the much-needed impetus for Bitcoin to shift towards a bullish trend, but with the U.S. backing for a Bitcoin spot price exchange-traded fund (ETF) still hanging in the balance, Capriole Investments adjudges that Bitcoin may have to hold for a little while longer.
The disconnection between Bitcoin and thriving U.S. equities is no more glaring than now, given that the Federal Reserve appears to be taking a step back from its tight monetary policy. Simultaneously, the S&P 500 is enjoying its most extended winning streak in years. It’s something of a paradox, considering the correlation that has traditionally linked these entities.
While Bitcoin continues to languish below resistance at both long and short timeframes, the S&P 500 is excelling, underpinned by the Federal Reserve essentially hitting the pause button on rate hikes, signalling potentially the tightest monetary policy on record. Despite this positive economic backdrop, however, Bitcoin’s current technicals and fundamentals somehow maintain a defensive stance against a shift to bullish.
The winds of a favourable macroeconomic backdrop are blowing, a condition that many believe should bode well for Bitcoin in the coming years. But as it stands, its supports are holding at around $28K, $24K, and low-$20Ks, price points where investors could find opportunities abound.
In the face of these events, Bitcoin has been characterized as being in “distribution”, a scenario described using the Wyckoff method. With the support at $30K already breached, a newly emergent bearish trend has placed the target of this downturn around $25K. This is the price point reached if the magnitude of the downswing matches the upswing.
Despite this outlook, one would be remiss not to acknowledge the potential for the situation at hand to turn around. Bitcoin still has a potential lifeline in the form of a U.S.-approved Bitcoin ETF, a move that could change the game significantly and tilt the scales to its favour. Amid these shifting tides, market players continue to watch closely, preparing for any eventual scenario that may unfold.
Source: Cointelegraph
