As the Bitcoin price continues to hover below $60,000 following a significant 20% decline, the market has experienced a widespread crash. Analyst Norok has emphasized the critical importance of the $51,800 support level for Bitcoin’s bullish trend. This support level, previously seen in December 2023, has now become a crucial point for the cryptocurrency’s price movement.
Despite the support previously built up by bulls at the $62,000 level, it has now been broken by bears and has transformed into a resistance level for Bitcoin. However, Norok remains optimistic about Bitcoin’s outlook, stating that the cryptocurrency has not yet turned bearish. He emphasizes that a break below the $51,800 support is necessary for him to consider a bearish scenario, which would potentially end the bullish trend seen from 2023 to 2024.
Short-Term Support at $56,900
In the short term, Norok identifies $56,900 as a crucial level that bulls must maintain to reinforce the current bullish trend. He suggests that holding this support could allow Bitcoin to regain momentum and resume its upward trajectory. This moment is deemed highly decisive in determining the future price action of Bitcoin.
One significant factor contributing to the recent decline in the Bitcoin price is the shift from inflows to outflows in Spot Bitcoin ETFs. Inflows into these ETFs are typically bullish as issuers are required to hold BTC to back the assets they sell to investors. However, with a trend towards outflows as investors withdraw their funds, selling pressure in the market has intensified.
Spot Bitcoin ETFs have witnessed six consecutive days of outflows, culminating in a record high outflow of $563.7 million on Wednesday, as reported by Coinglass. This trend, if sustained, could continue to drive the Bitcoin price lower, potentially leading to a test of the critical $51,800 support level highlighted by Norok. Conversely, a reversal towards inflows would necessitate issuers to buy BTC, potentially sparking a price recovery.
The current price action of Bitcoin is influenced by various factors, from critical support levels identified by analysts like Norok to the dynamics of Spot Bitcoin ETFs. As the market strives to find its footing following the recent crash, investors are advised to conduct thorough research and exercise caution when making investment decisions. The volatility in the cryptocurrency market underscores the importance of staying informed and being prepared for various scenarios that may impact the price of Bitcoin.
