Bitcoin's Slide Below $60K Signals Drop to $52K, Eyes Long-Term Gain

Key Takeaway

• Bitcoin's recent break below $60k support suggests potential decline to $52,000, aligning with the 61.8% Fibonacci retracement level.
• The shift below an ascending 50-day moving average and bearish RSI configuration indicate a short-term trend reversal.
• Despite short-term weakness, historical patterns post-halving suggest bullish upswings may follow in the longer term.

Bitcoin's Precarious Position

Bitcoin's journey through 2024 has been a rollercoaster, reaching an all-time high of approximately $74,000 in mid-March, only to face a significant downturn. The cryptocurrency has broken below the critical support level of $60,000, signaling potential further declines. This breakdown is particularly noteworthy as it aligns with the 38.2% Fibonacci retracement level from the January low to the March high. Additionally, Bitcoin's failure to maintain above the ascending 50-day moving average in April suggests a shift from a bullish to a bearish phase, further evidenced by the RSI indicator's move below the 60 level.

ETFs and Market Sentiment

The performance of Bitcoin ETFs has been underwhelming, with five consecutive days of outflows from U.S. spot Bitcoin ETFs. This trend has pushed Bitcoin's price below the average ETF purchase price of around $58,000, placing many ETF positions in a precarious situation. The launch of spot Bitcoin ETFs in Hong Kong also failed to meet expectations, with a turnover volume of just $11 million, significantly lower than anticipated. These developments have contributed to the bearish sentiment surrounding Bitcoin, despite Standard Chartered's long-term bullish outlook, revising its end-of-2024 price prediction for Bitcoin from $100,000 to $150,000.

Macro Headwinds and Buying Opportunities

The broader U.S. liquidity measures have deteriorated since mid-April, adding to the challenges facing Bitcoin. Standard Chartered suggests that investors consider buying Bitcoin if it reaches the $50K-$52K range or if the upcoming U.S. CPI data is favorable. This advice comes amidst a backdrop of increasing macro headwinds and liquidity concerns that have dampened the cryptocurrency's momentum. Despite these short-term challenges, the bank remains optimistic about Bitcoin's long-term potential, with predictions of its price reaching as high as $250,000 by 2025, depending on market positivity and geopolitical factors.

Street Views

• David Keller, CMT (Bearish on Bitcoin):

  "With bitcoin finally breaking below that support level at $60k this week, we see much further downside potential before the long-term uptrend resumes... Going into May, bitcoin is making lower lows and lower highs, and now sits below a downward-sloping 50-day moving average."