The recent performance of Bitcoin has left much to be desired in the crypto market. The leading cryptocurrency struggled over the past week, experiencing significant losses along with other large-cap assets. Despite some brief moments of recovery, the overall trend suggests that Bitcoin is not out of the woods yet.
According to a recent report by blockchain intelligence firm CryptoQuant, Bitcoin may be headed for an even further decline. The analytics platform suggests that the premier cryptocurrency could reach the $60,000 price mark after losing a critical support level. This prediction is based on the recent movement of Bitcoin, which saw the price fall below $65,000 for the first time in over a month.
The analysis by CryptoQuant highlights the importance of the on-chain realized price of Bitcoin, which currently stands below $65,800. This level is seen as a crucial support level, and if the price falls below it, a significant correction could be on the horizon. Historically, every time Bitcoin has crossed beneath this level, it has experienced an 8-12% correction, leading to a $60,000 price target.
The bearish projection for Bitcoin is further supported by the declining on-chain metrics and market demand. Short-term holders are reducing their holdings rather than purchasing more Bitcoin, indicating a lack of confidence in the current market conditions. Additionally, demand from large investors, or whales, is not showing the strength typically associated with bullish momentum.
Another factor contributing to the bearish sentiment surrounding Bitcoin is the declining stablecoin liquidity in the market. The growth in Tether USD’s market capitalization has slowed significantly, from $12.6 billion in late April to $3.7 billion currently. This is the slowest growth rate since November 2023. Higher stablecoin liquidity is essential to fuel price rallies in the crypto market.
As of now, the Bitcoin price is hovering around $64,000, with a 1.2% decline in the last 24 hours. Over the past two weeks, the premier cryptocurrency has seen a nearly 8% decrease in value, according to data from CoinGecko. This downward trend, coupled with the lackluster market metrics, paints a bleak picture for the future of Bitcoin in the short term.
The recent analysis by CryptoQuant and the prevailing market conditions point towards further downside for Bitcoin. The lack of strong market demand, declining stablecoin liquidity, and historical price patterns all suggest that the premier cryptocurrency may be in for a rough ride in the coming days. It is important for investors to exercise caution and closely monitor the price movements and market indicators to make informed decisions in such a volatile environment.
