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Bitcoin Traders See Short-Term Bearish Target at $60K as Miners Pare Holdings

Jun 13, 2024
    Traders anticipate a deeper drop for bitcoin (BTC) in the coming weeks, despite a strong equity market and favorable U.S. crypto policies, pointing to selling activity from miners and general profit taking.Bitcoin’s upper potential may be limited due to miners’ cash demand, with on-chain data showing an increase in the transfer of BTC from mining pools to exchanges.The movement of funds to an exchange is often seen as a sign of an impending sale.
As an experienced financial analyst, I believe that traders’ anticipation of a deeper drop for bitcoin (BTC) in the coming weeks is a valid concern. The strong equity market and favorable U.S. crypto policies may not be enough to offset selling activity from miners and profit-taking. Miners are an essential component of the Bitcoin network, and their cash demand could limit the upper potential of bitcoin’s price.Despite a robust equity market and supportive U.S. cryptocurrency regulations, traders anticipate a more significant Bitcoin (BTC) price correction in the upcoming weeks. This prediction stems from increased selling pressure originating from miners and the widespread practice of profit-taking among investors.

In an email to CoinDesk on Friday, FxPro senior market analyst Alex Kuptsikevich stated, “The dollar is experiencing a fresh surge in value and popularity among investors, while the desire for risk assets like equities is waning. Bitcoin’s intraday peak prices have been progressively decreasing as a result, forming a series.”

Bitcoin keeps challenging the resistance of its 50-day moving average without giving in to further decline. This consistent probing of support levels makes it easier for the bears to potentially push the price down towards the next significant mark at $60,000.

Some experts suggest that miners, who contribute significant computational power to maintain the Bitcoin network, could potentially be among those selling the cryptocurrency.

As a cryptocurrency analyst at a Japanese exchange like bitBank, I’ve observed that Bitcoin’s upper limit for growth might be constrained due to miners’ increasing need for cash. Since May, there has been a consistent decrease in Bitcoin miners’ net positions – the difference between BTC inflows and outflows – indicating tighter mining operations post-halving in April.

Analysts noted that although the amount of Bitcoin leaving miner wallets has risen, this doesn’t automatically lead to a decrease in Bitcoin’s price. Instead, they observed that prices often remain stable under such circumstances.

According to the latest report by CryptoQuant released on Wednesday, there was a significant rise in Bitcoin transfers from mining pools to exchanges, reaching a two-month peak on June 9. Additionally, professional over-the-counter (OTC) desks recorded their highest daily trading volume since late March.

On Wednesday, Bitcoin surged past $68,000 to reach $70,000 due to the surprising low inflation data in May’s U.S. Consumer Price Index (CPI). However, the celebration was short-lived as the Federal Open Market Committee (FOMC) revised their projected interest rate cuts for 2021 down from three to just one, causing Bitcoin’s price to retreat on Thursday.

Some significant cryptocurrencies like BNB from BNB Chain, XRP, and Solana’s SOL have experienced drops exceeding 10% since Monday. In contrast, riskier meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) have suffered losses of around 15%.

Over the past few days, these withdrawals occurred consistently in Bitcoin exchange-traded funds (ETFs) listed in the U.S., resulting in a total outflow of approximately $500 million since Monday. This represents their most significant weekly loss since late April when they experienced a net decrease of around $1.2 billion over six consecutive days.

Bitcoin appears to have broken free from its typical connection to the tech-heavy Nasdaq index. Instead of following its usual trend of correlating positively with the Nasdaq, Bitcoin has lately diverged from this pattern.

Some market analysts have pointed out that the short-term sentiment towards ether appears less favorable compared to bitcoin.

According to Rachel Lin, the CEO and co-founder of SynFutures, based on technical analysis, both Bitcoin and Ethereum seem poised for a bearish trend. However, Ethereum’s situation appears more concerning than that of Bitcoin. If Ethereum fails to retake the $3,700 mark shortly, there could be further declines in the near future.

According to Lin, Bitcoin reaching the $67,000 mark is significant, as it currently sets an important benchmark for the cryptocurrency. Regarding the future perspective, she maintains a positive stance and believes the trend will continue to be upwards.

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2024-06-14 14:31