Bitcoin investors worry about future amid price decline. Bitcoin (BTC) has lost 13% in value since March, triggering concerns over its future and reflecting potential tightening in risk appetite as higher interest rates loom.
According to Bloomberg, Bitcoin (BTC) has seen losses of about 13% since March, following significant quarterly rises of 67% and 57%. Questions arise if this signals a stricter risk appetite outlook.
Austin Reid, FalconX’s global head of revenue and business, considers the market’s uncertainty temporary. A slowdown in spot Bitcoin ETFs is seen as reducing interest.
Matthew O’Neill, co-director of research at Financial Technology Partners, notes a market euphoria after January’s ETF approvals, followed by a price correction. He believes professional investors view the current dip as a buying opportunity before future increases.
Fear and Greed Index records sharp decline
On June 25, the crypto market’s fear and greed index fell to 30 points, the lowest since September 2023.
The index’s shift towards fear happened after Bitcoin dropped from $62,500 to $59,100, influenced by news about Mt. Gox client payments.
Blockchain analyst Willy Woo cited a “cascading long squeeze” and miners’ capitulation post-April’s Bitcoin halving, driving the asset to a 53-day low.
Woo suggests that miners selling BTC for equipment upgrades were a factor, predicting a bearish phase if BTC falls below $54,000.
What will happen to the Bitcoin ETF?
CoinShares data shows that Bitcoin ETFs attracted $2.6 billion in Q2, compared to $13 billion in Q1, with renewed interest at June’s end.
Despite market instability and $1 billion being withdrawn recently from cryptocurrency investments, inflows into Bitcoin ETFs may signal revived investor interest.
Attention is now on the Ethereum ETF, with Citi’s analysis projecting that Ethereum’s ETF launch could attract $3.8 to $4.5 billion, potentially raising ETH’s price by 23-28%.
Will the situation improve?
CryptoQuant analysts expect positive cryptocurrency market movements in Q3 2024.
Waning miners’ selling pressure might spark another upward rally if all selling volume is absorbed.
CryptoQuant noted falling profitability post-halving pushed miners to sell BTC to cover costs, affecting market dynamics.
Raoul Pal, former Goldman Sachs CEO, forecasts significant growth for cryptocurrencies in Q4 2024, particularly around the U.S. presidential election.
Experts maintain a bullish medium-term forecast for Bitcoin despite the current local downward correction.
