The recent performance of Bitcoin has not painted a positive picture for the cryptocurrency market. In the past week, Bitcoin, along with other large-cap assets, has seen significant losses. This downtrend has raised concerns among investors and analysts about the future direction of the leading cryptocurrency.
Despite some temporary recovery, the recent price action data suggests that Bitcoin is not out of the woods yet. In a recent report by blockchain intelligence firm CryptoQuant, a grim prognosis was put forward regarding the price of Bitcoin. The analytics platform predicts that Bitcoin could be on its way to hitting the $60,000 price mark after losing a crucial support level.
CryptoQuant’s analysis highlights that Bitcoin is currently trading below the critical support level of $65,800, which serves as the on-chain realized price. This level acts as a support, and a break below it could signal a further decline in Bitcoin’s price. The firm predicts an 8-12% correction if the price falls below this level, leading to the $60,000 price target.
The analysis by CryptoQuant is further supported by the weakening on-chain metrics of Bitcoin. The demand from short-term holders has been dwindling, with fewer purchases and decreasing holdings. Additionally, the demand from large investors, often referred to as whales, lacks the usual bullish momentum associated with price rallies.
Stablecoin liquidity has also been a cause for concern in the Bitcoin market. The decline in stablecoin liquidity, particularly seen in Tether USD’s market capitalization growth, has slowed down significantly. This slowdown in liquidity growth poses a challenge for initiating price rallies in the cryptocurrency market, including Bitcoin.
At the time of writing, Bitcoin is hovering around $64,000, with a 1.2% decline in the last 24 hours. Over the past two weeks, Bitcoin has seen a nearly 8% decrease in value. These fluctuations in price, along with the concerns raised by CryptoQuant’s analysis, indicate a challenging period ahead for Bitcoin and the broader cryptocurrency market.
Through a combination of technical analysis, on-chain metrics, and market dynamics, it is evident that Bitcoin’s price performance is under scrutiny. The potential for further downside and the impact of declining stablecoin liquidity present challenges for Bitcoin’s price trajectory. As investors navigate these uncertain times, staying informed and closely monitoring market trends will be crucial for making informed decisions in the volatile cryptocurrency market.
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