Analysts at CryptoQuant say that Bitcoin has fallen below its 50-day average of around $65,800, which is a key support level. This means that the price could go down by 8% to 12%. Analysts said that the price of the coin could go down to $60,000.
Bloomberg says that the market value of the biggest cryptocurrency, BTCUSD, -2.87%, fell 2% on Tuesday to about $64,625. It’s up more than 50% so far this year, but it’s still more than 12% below its all-time high of $73,798 in March.
Katie Stockton, founder and managing partner at Fairlead Strategies, says that the level of $60,000 marks the bottom of a trading range that goes up to about $71,600.
“Long-term momentum is positive, so we keep a bullish bias based on the idea that the uptrend will eventually hold,” Stockton wrote in a note on Monday.
Still, bitcoin’s upward trend seems to be slowing down in the short term, though CryptoQuant analysts pointed out that the price’s downside seems limited. Traders have been selling more bitcoin since the end of May, according to data that is stored on the blockchain.
Analysts said that demand from “whales,” or people who have a lot of bitcoin, has been especially weak. Analysts say that whale holdings are growing at a rate of 4.8% per month, up from 2.4% per month at the end of May. However, this is much slower than the 6% to 10% per month growth rate of whale demand when bitcoin prices went up in the first quarter.
Jake Ostrovskis, an over-the-counter trader at Wintermute, said that Bitcoin’s recent drop in value was partly caused by a change in prices across the market after the Federal Reserve was cautious about lowering interest rates at its June meeting. The dot-plot forecast that came out last week showed that the Fed thought rates would go down one time during the rest of the year. The CME FedWatch Tool shows that traders in fed-fund-futures are still expecting two cuts by the end of the year.
Ostrovskis wrote in a Monday note, “Cut rates have already been made by global central banks like the Bank of Canada and the European Central Bank, suggesting a shift toward monetary easing.” This could mean that the current bearish mood won’t last long.
