3 signs that indicate that the price of Bitcoin is approaching the bottom
The price of bitcoin fell between April 30 and May 1, with its price dropping 11.5% to $56,522. The decline triggered $172 million in leveraged long position liquidations, notably lower than Bitcoin (BTC) futures open interest, which stood at $28.9 billion before the decline. As a result, it would be easy to think that the bulls were suddenly taken away.
Uncertainty should fall after the Federation minutes are published.
Some analysts believe that investors are in good shape until US Federal Reserve Chairman Jerome Powell finishes his speech. 5.25%, the U.S. Department of the Treasury has great doubts about the fiscal capacity of the government budget.
In the year The two-year U.S. Treasury note rose to its highest level in five months on April 30, at 5.06%, as investors sought higher profits following the announcement of a $1.07 trillion deficit in the first half of 2024. In the year Since the Fed passed a rate hike in 2023, interest costs have risen 23 percent in the first half of 2024 and are expected to rise unless rates are hiked.
Bitcoin is not alone in facing a downturn: worsening macroeconomic conditions have made investors more risk-averse. The Russell 2000 index, which tracks U.S. mid- and small-cap companies, has fallen 8.2 percent over the past 30 days, erasing gains from the past two months. Meanwhile, WTI oil prices have fallen 8.3% since April 5, reaching a five-month high of $87.91.
Following a series of strong first-quarter corporate earnings reports from major companies such as Amazon, Microsoft, Google, Netflix, TSMC, Samsung, Coca-Cola, a key indication that Bitcoin's price correction may be lower than traditional markets. Morgan Stanley, Citigroup, HSBC and Barclays. A temporary recovery in the stock market will keep investors away from Bitcoin and other riskier assets, though traders may look for alternatives if the Fed decides to keep rates high for longer.
Bitcoin mining capital in China FUD and strong crypto flow
Bitcoin miners are under intense pressure after the April 20 midpoint, which saw their reward cut by 50% to 3.125 BTC per block. CryptoQuant CEO Ki Young Joo mentioned that the speculations of miners going to the exchange show no sign of elasticity “for now”. Young Zhu added that if Bitcoin's price decline “spends a spell that lasts for weeks, big miners are in danger of wiping out their Bitcoin collection.”
Thus, Luxor Technology reports that another sign that Bitcoin's downfall is nearing its end is the persistence of miners, who refuse to sell despite a 57% drop in the Hashrate Index. This metric evaluates the expected daily return of a terabyte of hashing power, increasing network complexity, Bitcoin price, and transaction fees.
To understand the broader sentiment in the cryptocurrency market, it can be enlightening to examine the stable coin demand in China, particularly the US dollar (USDC). The premium on USDC transactions over the official US dollar rate provides insight into the movement of retail investors, indicating whether they are entering or exiting the cryptocurrency markets.
Related: Reasons Bitcoin Price Has Fallen 11% Since Halving
On May 1, the USDC premium in China increased to 2.7%, indicating a strong willingness to convert Chinese yuan into USDC. This continued interest points to positive sentiment for cryptocurrencies in China, bolstering optimism for Bitcoin, which recently saw a 20% price drop in three weeks.
However, the outlook on the market improved following the Federal Reserve's notes and fears of mining regulation being unfounded so far, but the state of the US markets shows a different trend. In particular, net outflows from US-listed exchange-traded funds reached $635 million over the past five trading days.
Such findings suggest that investment flows are crucial in determining Bitcoin price movements, there is no doubt that the $56,500 support level will hold.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
