The cryptocurrency market, particularly Bitcoin (BTC), has been exhibiting a range-bound behavior between $60,000 and $70,000 since March. Despite the highly-anticipated halving event in April, the market lacked significant catalysts, leading to a sell-the-news scenario. Inflows from exchange-traded funds (ETFs) have decreased, contributing to a bearish sentiment.
According to FxPro trader Alex Kuptsikevich, Bitcoin could face a panic sell-off if it closes below the $60,000 level in the coming days. He suggests that sentiment may turn bullish if BTC breaks above $65,000, potentially fixing the price at the 50-day moving average and the reversal area in early May.
The recent price action has been characterized by a sequence of lower lows and lower highs, indicating investors selling into strength during price rallies. Factors contributing to this pressure include asset sell-offs by miners and concerns about tighter regulation of cryptocurrencies, particularly after the drop in mining difficulty following April’s halving.
The behavior of short-term Bitcoin holders, those holding tokens for less than 155 days, may significantly influence market trends in the coming months. Historically, instances where 94% of both long and short-term holders were in profit have preceded significant drawdowns in Bitcoin prices in the following four to six months. This pattern suggests that short-term holders, once in profit, tend to sell actively, leading to price corrections.
While the current cycle may differ due to institutional demand and improving macroeconomic conditions, a weakening of these supportive factors could lead to a price drawdown similar to past cycles. This insight underscores the importance of monitoring both short-term holder behavior and broader market trends for understanding Bitcoin’s price dynamics in the coming months.
