Analysts Are Gloomy About Bitcoin’s Short-Term Price Outlook Right Now

The near-term outlook for Bitcoin has deteriorated, according to analysts. Some now see a possible extension of Monday's sharp drop in prices.
"There could be another dump as the outflows from the Coinbase Pro cryptocurrency exchange have dried along with increased transfers of coins to exchanges," David Lifchitz, chief investment officer of Paris-based quantitative trading company ExoAlpha, told CoinDesk.
Bitcoin fell over 20% to $ 30,305 on Monday as the spot market sold heavily.
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Coinbase Pro's outflows, which are synonymous with institutional purchases, have declined sharply from the three-year high of 55,000 BTC observed on Jan. 2.
The Grayscale Bitcoin Trust (GBTC), the largest publicly traded crypto investment trust, has not seen any inflows since Christmas as it was temporarily closed, analyst Joseph Young noted. Grayscale is owned by the Digital Currency Group, the parent company of CoinDesk.
This means that the pressure on the demand side, which over the past three months has been instrumental in moving Bitcoin from $ 10,000 to $ 41,000, has eased. The trust reopened on Tuesday.
Meanwhile, forex deposits have picked up, a sign that some investors may be looking to liquidate holdings and take profits.
See also: Blockchain Bites: Bitcoin is trading sideways as US inflation is subdued
The number of coins held on exchanges rose by over 57,000 BTC on Tuesday. According to the blockchain analysis company Chainalysis, this is the biggest change since the stock market crash on March 12, 2020.
The exchanges have seen an average inflow of 103,000 BTC per day for the past seven days - more than the 180-day average of 83,700 BTC.
"At the very least, increased inflows suggest that the type of self-custodian buyers, usually the larger investors, are not buying that much right now," chain analysis economist Philip Gradwell told CoinDesk. "These coins could be held on exchanges to tip over when prices go up rather than sell out right away, but that will limit any profits or even create another downturn."
Technical charts also call for the decline to be extended on Monday.
"With Bitcoin trading below the Ichimoku cloud, I still see downward pressure in the short term," said Patrick Heusser, trading manager at Swiss Crypto Finance AG.
The Ichimoku cloud, a technical tool developed by Japanese journalist Goichi Hosoda in the late 1960s, contains several lines that can be used to identify support and resistance levels, as well as other important information such as trend direction and momentum (see below).
When an asset is trading below the cloud (red line) the trend is considered bearish, as is the case with Bitcoin at press time.
Heusser said, “$ 29,000 is the make-or-break level. It could get ugly if that support is violated. “$ 36,000 is the level the bulls have to beat.
Chris Thomas, Head of Digital Assets at Swissquote Bank, sees a consolidation in the range of $ 33,000 to $ 36,000 for the rest of the week.
The consolidation could end in an uptrend if institutional demand returns. "We could have a lot of new buying activity in the next few weeks," said Thomas, highlighting the reopening of Grayscale Investments' cryptocurrency products to new investors.
While the cryptocurrency may suffer deeper declines in the short term, the broader bias remains bullish.
Also read: Multiple tokens See rally in the midst of the upcoming "Alt-Season"
"The youngest institutional investors have long horizons and will absorb short-term price shocks," said Jehan Chu, managing partner at Kenetic Capital in Hong Kong. "Expect temporary volatility and then a bounce back to the $ 40,000 level, followed by $ 50,000 if the bitcoin percent land grab continues."
Bitcoin is trading near $ 34,210 at press time, down 4% in 24 hours.
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Analysts are currently grim about Bitcoin's near-term price outlook
Analysts are currently grim about Bitcoin's near-term price outlook
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