The cryptocurrency market experienced a sharp downturn on April 2, as Bitcoin (BTC) prices plummeted below $65,800, resulting in over $130 million in losses for leveraged bull traders. Despite this setback, indicators from BTC network fundamentals and key macroeconomic indices suggest the potential for an imminent rebound, raising questions about BTC’s trajectory leading up to the forthcoming Halving event.
Factors Behind Bitcoin’s Price Decline:
The significant drop in Bitcoin’s price, from $71,317 to $65,800, during morning trading hours GMT on April 2, can be attributed to several key factors. Firstly, Bitcoin Exchange-Traded Funds (ETFs) experienced a negative start to the week, with a total net outflow of $85.7 million on April 1. Notably, Grayscale’s GBTC led the outflows, shedding over $302 million, exerting downward pressure on BTC prices.
Additionally, rapid liquidations in the derivatives markets accelerated the decline. Coinglass’ liquidation heatmap chart revealed over 140,290 traders had their leveraged positions liquidated, totaling $437.6 million within the last 24 hours. Long traders bore the brunt of the losses, with over $133.7 million wiped out.
Anticipated Recovery and Market Outlook:
Despite the bearish sentiment stemming from widespread liquidations, several factors hint at a potential recovery in Bitcoin prices. Recent statements from Federal Reserve Chair Jerome Powell, dispelling recession fears and hinting at possible rate cuts, provide a positive backdrop for market sentiment. This sentiment is reinforced by BTC’s steady fundamentals and positive social sentiment.
Moreover, BTC whales have demonstrated resilience amid market turbulence, investing over $6.8 billion to acquire 100,000 BTC in the last 30 days. Despite the price decline on April 2, whales continue to hold onto their acquisitions, signaling confidence in a potential rebound.
Forecast and Bullish Sentiment:
With BTC prices falling below the 30-day simple moving average (SMA), attention turns to potential recovery scenarios. A positive outlook on the upcoming Non-Farm Payrolls (NFP) report, coupled with strategic moves by retail traders, could alleviate bearish pressure and spur a bullish recovery phase.
BTC’s price forecast suggests a rebound above $70,000 before the Halving event, provided that bulls prevent further downswings below the $65,000 level. Key resistance may be encountered around the $68,000 territory in the near term, but a reclaim of the $70,000 area could signal a bullish reversal.
In conclusion, while the recent downturn in Bitcoin’s price has sparked concerns, indicators point towards a potential recovery driven by positive market sentiment, resilient whale activity, and favorable macroeconomic conditions.
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