Bitcoin Price Prediction: Dips Below $61,000 Amid Regulatory Scrutiny and Fed’s Hawkish Stance

Forex
May 9, 2024
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Bitcoin Price Prediction

As Bitcoin price predictions become increasingly cautious, the cryptocurrency continues to face substantial headwinds. Recently trading around $61,540, Bitcoin dipped to an intra-day low of $60,910, influenced by escalating regulatory scrutiny in the U.S. and a hawkish Federal Reserve stance on interest rates.

Despite these challenges, strategic initiatives such as Hong Kong’s $1 billion crypto ETF liquid fund are being introduced to bolster market stability and potentially mitigate further losses.

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

Token Unlocks and Bitcoin Distributions Trigger Market Downturn

Research from 10x Research indicates that approximately $2 billion worth of tokens are scheduled for release over the next ten weeks. This influx of previously locked tokens is likely to inflate market supply and could dampen altcoin values.

As these assets enter the market, venture capitalists might sell off their holdings to capitalize on gains, thereby stifling potential upward price movements for cryptocurrencies.

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

Increased supply from token unlocks could pressure crypto prices downward.
Venture capitalists’ potential sell-offs may hinder market recovery efforts.
Bitcoin and altcoins face challenges as market braces for more distributions.

Stronger US Dollar and High-Interest Rate Expectations Pressure Bitcoin Prices

The strength of the U.S. dollar, bolstered by expectations that the Federal Reserve may maintain high interest rates for a prolonged period, is exerting pressure on Bitcoin prices.

This scenario is reinforced by higher U.S. Treasury yields, which support the dollar’s ascent. Susan Collins of the Federal Reserve noted that reaching the 2% inflation target might slow economic growth, adding complexity to the rate outlook.

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 anticipation of enduring high rates, directs investors towards more traditional assets, thus suppressing Bitcoin’s value.

Strong US dollar and high Treasury yields dampen Bitcoin’s appeal.
Fed’s cautious policy may slow growth, keeping rate hike options open.
Investors turn to safer assets, putting downward pressure on Bitcoin prices.

Whale Buys Reflect Confidence in Bitcoin Amid Economic Uncertainties

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

Over the past day, these investors have purchased approximately $971 million worth of Bitcoin, as trading volumes generally decreased.

As #Bitcoin ranges tightly between $61K and $64K, large whales have made some accumulation moves over the past 24 hours. Wallets with 1K-10K $BTC have collectively accumulated ~$941M worth of coins, rebounding to their highest holding level in 2 weeks. https://t.co/NkYwRsc8Pd pic.twitter.com/LWAt03TgUP

— Santiment (@santimentfeed) May 8, 2024

According to data from Santiment, wallets holding between 1,000 and 10,000 BTC have added over 15,000 BTC to their balances.

This surge in whale activity occurs even as Bitcoin’s price dipped to $27,000, underscoring a robust optimistic sentiment among major stakeholders in the cryptocurrency market.

Whales accumulate $971 million in Bitcoin, signalling 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% at $61,540, suggesting a bearish bitcoin price prediction. As BTC approaches critical technical thresholds, its market behaviour suggests cautious optimism among traders. Currently, the pivot point is 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 further barriers at $67,149 and $69,441. Support levels are established at $60,928, $58,927, and $56,625, marking significant fallback positions in case of price retractions.

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

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