Drops below $61,000 amid regulatory scrutiny and Fed’s aggressive stance

Last updated: May 9, 2024 06:04 EDT | 4 minutes of reading

Bitcoin Price Prediction

As Bitcoin Price Predictions becoming increasingly cautious, cryptocurrency continues to face substantial headwinds. Recently trading around $61,540, Bitcoin fell to an intraday low of $60,910, influenced by escalating regulatory scrutiny in the US and an aggressive stance by the Federal Reserve on interest rates.

Despite these challenges, strategic initiatives such as Hong Kong $1 Billion Crypto ETF Liquid funds are being introduced to reinforce market stability and potentially mitigate further losses.

This fund, along with partnerships like Wintermute’s collaboration with OSL and HashKey, aims to increase liquidity for Bitcoin and Ethereum ETFs, offering a glimmer of hope for recovery amid prevailing market uncertainty.

Token unlocks and Bitcoin distributions trigger market downturn

Research from 10x Research indicates that approximately US$2 billion in tokens are scheduled for release in the next ten weeks. This influx of previously locked tokens will likely inflate market supply and could lower altcoin values.

As these assets enter the market, venture capitalists may sell their holdings to capitalize on the gains, thus stifling potential upward price movements in cryptocurrencies.

This scenario could potentially usher in an extended corrective period for the crypto market.

• Increased supply due to token unlocking could put downward pressure on cryptocurrency prices.
• Potential sell-offs from venture capitalists could hamper market recovery efforts.
• Bitcoin and altcoins face challenges as the market prepares for more distributions.

Expectations of Stronger US Dollar and High Interest Rates Pressure Bitcoin Prices

The strength of the US dollar, reinforced by expectations that the Federal Reserve may maintain high interest rates for an extended period, is putting pressure on Bitcoin prices.

This scenario is reinforced by higher US Treasury yields, which support the rise of the dollar. The Federal Reserve’s Susan Collins noted that hitting the 2% inflation target could slow economic growth, adding complexity to the outlook for rates.

While additional rate hikes are not guaranteed, they remain possible, reflecting the Fed’s cautious stance on monetary policy. This financial environment, characterized by a robust dollar and the expectation of high and lasting rates, directs investors towards more traditional assets, thus suppressing the value of Bitcoin.

• The strong US dollar and high Treasury yields diminish Bitcoin’s appeal.
• The Fed’s cautious policy could slow growth, keeping options to raise rates open.
• Investors turn to safer assets, putting downward pressure on Bitcoin prices.

Whale purchases reflect confidence in Bitcoin amid economic uncertainty

Despite economic uncertainty and the Federal Reserve’s cautious stance, major Bitcoin investors, commonly referred to as “whales,” have demonstrated significant confidence in the cryptocurrency.

Over the last day, these investors purchased approximately $971 million worth of Bitcoin as trading volumes generally declined.

According to data from Santiment, wallets with between 1,000 and 10,000 BTC added more than 15,000 BTC to their balances.

This increase in whale activity comes even as the price of Bitcoin has fallen to $27,000, underscoring a strong bullish sentiment among key cryptocurrency market stakeholders.

• Whales accumulate US$971 million in Bitcoin, signaling market confidence.
• Holdings in large Bitcoin wallets grow by over 15,000 BTC.
• Market sentiment remains positive despite lower Bitcoin prices.

Bitcoin Price Prediction

Bitcoin (BTC) today shows a modest gain, up 0.50% to $61,540, suggesting a bearish bitcoin price prediction. As BTC approaches critical technical limits, its market behavior suggests cautious optimism among traders. The pivot point is currently set at $62,638, closely aligning with the 50-day exponential moving average (EMA) at $62,509. This proximity indicates a potential battleground for bullish and bearish sentiments.

Bitcoin Price Prediction – Source: Tradingview

BTC faces immediate resistance at $64,748, with additional hurdles at $67,149 and $69,441. Support levels are set at $60,928, $58,927, and $56,625, marking significant buffer positions in case of price pullbacks.

The Relative Strength Index (RSI) at 40 suggests bearish momentum below the 50 EMA. A decisive move above this EMA could lead to a more bullish outlook, while remaining below could intensify selling pressures.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You can lose all your capital.

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