Bitcoin Struggles Below $60K: Consolidation or a Deeper Correction Ahead?
Bitcoin (BTC) has been unable to maintain its position above the $60,000 mark, raising concerns about its near-term outlook. After gaining 4.3% between August 16 and 18, Bitcoin’s price reversed, falling to $58,500.
Despite strong macroeconomic data that typically boosts market sentiment, Bitcoin’s failure to hold gains suggests the decline is driven by factors unique to the cryptocurrency market.
#bitcoin failed to hold above $61k, dropping through $59.5k, an expected support zone. Price action has been slow, but it recently reclaimed $59.5k. Watching closely to see if this level holds, with $60.5k liquidity in focus.A drop below could target Monday’s low.#trading #crypto
— NoDimes ₿ (@NotteJN) August 21, 2024
As of mid-August, Bitcoin has struggled to close above the $63,000 resistance level, which remains a significant hurdle.
Macroeconomic Factors and Bitcoin’s Price Dynamics
Several macroeconomic factors are influencing Bitcoin’s current price movement. Analysts point to the unwinding of carry trades in Japan as a contributing factor, driven by rising interest rates and a strengthening yen.
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— Elizabeth Price (@mclxs36345864) August 20, 2024
From July 10 to August 5, the Japanese yen appreciated by 12% against the U.S. dollar, causing disruptions in markets reliant on debt leverage, including Bitcoin.
Moreover, the improving global economic outlook, supported by stronger-than-expected jobless claims and retail sales in the U.S., has shifted investor focus away from cryptocurrencies.
Goldman Sachs recently reduced its U.S. recession probability from 25% to 20%, citing robust economic data.
This has led to increased confidence in traditional financial markets, further dampening interest in riskier assets like Bitcoin.
Bitcoin ETF Outflows and Miner Profitability Concerns
Another factor contributing to Bitcoin’s struggle is the outflow from spot Bitcoin ETFs, which saw $372 million withdrawn in the two weeks ending August 16.
Institutional investors have historically played a crucial role in driving Bitcoin’s price upward, and the current reduction in inflows is a bearish signal for the market.
Concerns are rising about Bitcoin miners' declining profitability, these miners hold large $BTC reserves. To cover high energy costs, they might have to sell their coins. 👀
Glassnode data shows miners' balances at 1.80 million $BTC. This hasn't changed much from last month.… pic.twitter.com/IlVpgPnY7q
— Cointelegraph (@Cointelegraph) August 19, 2024
Additionally, Bitcoin miners face profitability challenges, with the “hash price index”—which measures earnings per petahash per day—falling sharply since the April 19 halving.
The index currently hovers around $43 per petahash per day, indicating diminishing returns for miners.
This raises concerns that some miners may be forced to sell their BTC holdings or even cease operations if Bitcoin’s price remains stagnant.
Bitcoin Price Forecast: Consolidation or Decline?
Bitcoin is currently consolidating within an ascending triangle pattern, with support around $59,250.
While this pattern often indicates a potential uptrend, Bitcoin’s inability to break above the $60,000 level could maintain its sideways action.
The Relative Strength Index (RSI) is neutral at 51, suggesting no strong momentum in either direction. The 50-day Exponential Moving Average (EMA) at $59,370 provides additional support.
In conclusion, Bitcoin’s outlook remains uncertain. A sustained break above $60,000 could revive bullish momentum, but failure to do so may keep the cryptocurrency in a consolidation phase or lead to further declines.
#Bitcoin’s still hanging in this purgatory zone at $60k, risking falling back to $50k or shooting up to $70k. Good news is that consolidation period is about to end within a month time. pic.twitter.com/OwY40JWns1
— H D (@ugns_d) August 21, 2024
Investors should consider selling below $60,000 and buying only on a confirmed breakout above this key resistance level.
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