(Kitco News) – The sharp sell-off in Bitcoin (BTC) extended further on Wednesday as the top crypto plunged nearly 7% overnight, hitting a low of $56,475 in early trading hours while the U.S. markets were closed.
Data provided by TradingView shows that BTC has now fallen more than 11.6% from $64,000, the price it traded when the halving occurred on April 20.
BTC/USD Chart by TradingView
The pullback has hit bullish derivatives traders hard, with data from Coinglass showing that $310.8 million in long positions have been liquidated in the past 24 hours versus $76.25 million in shorts.
The multi-day streak of selling has taken its toll on sentiment in the crypto market, with data from Alternative showing that the overall mood is now “Neutral” after being in “Greed” or “Extreme Greed” for the past month.
All told, Bitcoin’s price has declined approximately 20% over the past three months, but experienced crypto traders see it as part of the process, claiming this is just a routine correction in the Bitcoin bull market cycle.
“As painful as it may be to see Bitcoin's price retrace and/or move sideways… This is exactly what the cycle needs to resynchronise with historical price norms and the traditional Halving Cycle,” said market analyst Rekt Capital. “The longer this goes on, the better.”
Raoul Pal, founder of RealVison, noted that this is the fourth 20% pullback over the past 12 months, calling it, “pretty ordinary stuff.”
This is the 4th 20% correction in BTC in 12 months...pretty ordinary stuff. pic.twitter.com/YT3gs4jUlG
— Raoul Pal (@RaoulGMI) April 30, 2024
Less optimistic about the short-term price action was legendary trader Peter Brandt, who warned that a descending triangle chart pattern suggests a market top is in.
Comment on Bitcoin $BTC I have seen dozens of significant market tops over the years with charts that looked like this descending triangle.
A simple fact needs to be resolved -- that Bitcoin has not exceeded the tops made three years ago despite the halving and ETFs pic.twitter.com/hq96RrDJkk— Peter Brandt (@PeterLBrandt) April 30, 2024
When asked a follow-up question about the time frame for this “market top,” and whether or not Brandt was still “bullish on bitcoin's log exponential growth,” he replied, “Perhaps [a] dip into high 40s, then bull resumes.”
This outlook aligned with that of Thomas Fahrer, CEO of crypto-focused reviews portal Apollo, who tweeted, “Price might fall to $40K, but it might rise to $400K. That’s just how it is, and it’s a great bet.”
But there is cause for hope that the downside will be limited as data from Google Trends shows that searches for the phrase “buy the dip crypto” have spiked to the highest level since May 2022.
10x Research CEO and head analyst Markus Thielen said he sees the possibility of Bitcoin falling to $52,000 as the flows into spot BTC ETFs decline, but noted that the arrival of institutional investors will likely limit the downside in terms of depth and duration.
“Bitcoin has another 20% correction within a larger bull market,” he said in a Wednesday report. Thielen highlighted that there have been “three 20% corrections (August 2023, January 2024, and March/April 2024) since the 5th Bitcoin bull market started officially on June 25, 2023,” when Bitcoin established a new one-year high for the first time in a year.
“This correction is very different, as institutional investors have a risk management approach that differs from most retail traders,” he said. “Based on our estimates, the average entry price of the US Bitcoin ETF holders is approximately $57,300—potentially even 1-2% higher.”
And according to Rennick Palley, founding partner at VC firm Stratos, Bitcoin will soon be back on the uptrend and on its way to $150,000 or higher.
“When we surpass that threshold, brace for a robust breakout,” Palley said in a note to Kitco Crypto. “By midsummer, we foresee Bitcoin soaring above 75k. The current market surge stems partly from global liquidity shifts due to the US tax season; expect a rebound with injected liquidity.”
“As we analyze the present market against 2020, retail interest has surged significantly,” he added. “Anticipating the bull market's evolution until 2025, we foresee even greater retail involvement. We're still early in this cycle, potentially midway, unlike the peak of 2021. The emerging memecoin supercycle is gaining momentum, attracting retail interest over traditional VC-backed trades.”
“Predicting Bitcoin's trajectory by 2024, we envision potentials up to 150k,” Palley concluded. “However, precise targets lack clarity. The influx of major capital players will drive substantial growth over time.”
At the time of writing, Bitcoin trades at $56,885, a decrease of 6.22% on the 24-hour chart.
