The price of bitcoin is at a ‘critical juncture’
BTC’s next major move “will likely be dictated by macroeconomic trends and could be decisive,” Bitfinex analysts said
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You probably saw bitcoin’s latest price plummet, briefly falling below $86,000 for the first time since November. It comes as the Bybit hack and SEC moves grab headlines — not to mention the relentless non-crypto macro developments.
Even before BTC’s drop, Bitfinex analysts laid out the scene. Bitcoin had mostly traded between $91,000 and $102,000 for weeks, rearing its head to a peak around $109,000 last month.
“Bitcoin remains at a critical juncture after nearly 90 days of consolidation,” they explained. “As market participants await a catalyst, bitcoinʼs next major move will likely be dictated by macroeconomic trends and could be decisive.”
Fast forward a day, and Compass Point analysts Ed Engel and Joe Flynn note that BTC’s latest drop means it has broken the $92,000 support level (the cost basis for holders who bought within the last six months).
“Selling has accelerated as short-term holders are less likely to tolerate unrealized losses,” they explained. “$86,000 is the last line of defense before the air pocket of trading activity that took place between $77,000 to $86,000.”
BTC’s price hovered around $86,950 at 2 pm ET. That’s down 5% in the past 24 hours. It’s a 9% drop from seven days ago and a 17% decrease over the last month.
Trading volumes remain near year-to-date lows and slightly above pre-election levels, Engel and Flynn added.
CoinShares research head James Butterfill attributed the flow of $571 million out of bitcoin investment products last week to “uncertainty around trade tariffs, inflation and monetary policy.”
The US spot bitcoin ETFs saw $516 million more leave their coffers yesterday, Farside Investors data shows — the highest level since Jan. 8. Those funds have now endured net outflows for five straight days.
Bitcoinʼs increasing correlation with traditional markets has exacerbated this “corrective phase” seen across crypto assets, Bitfinex analysts argue, noting the S&P 500ʼs fall below the 6,000 level.
And if you missed it, Blockworks’ David Canellis took a look at the timing of the last bull market’s 50% correction, and what that could signal this time around.
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