(Kitco News) – Bitcoin (BTC) and the broader crypto market have seen a slight rebound in prices from Wednesday’s lows in early trading on Thursday as risk-tolerant dip buyers slowly reenter the market.
Market analyst Rekt Capital noted that it has been rare to see such a pullback from Bitcoin over the past year, saying, “Opportunities like this don't come around very often.”
#BTC
It has been very rare for Bitcoin to offer such depth on a retrace
Last time Bitcoin experienced a -23% pullback was in early 2023
That's just over a year ago
Opportunities like this don't come around very often$BTC #BitcoinHalving #Bitcoin pic.twitter.com/a4SyhHZlat— Rekt Capital (@rektcapital) May 2, 2024
According to market analyst CryptoChiefs, the previous month's low of $59,100 for Bitcoin “was a key level to claim before the end of Wednesday.”
“Looking at the 12-hour chart, we can see a strong rejection came from the attempt to reclaim,” he said. “Right now we are seeing indecision on BTC and it is chopping between $57k and $58k.”
CryptoChiefs said “Once we get a daily close back above $59.1k, giving acceptance back into the 2-month range, we can have more confidence that the local bottom is in. Until then we have a lot of liquidity building below which I am interested in.”
At the time of writing, Bitcoin trades at $59,350, an increase of 4.1% on the 24-hour chart.
BTC/USD Chart by TradingView
Yesterday’s BTC low of $56,525 marked a 23.5% drawdown from the record high set on March 14, in line with previous post-halving pullbacks. This has enticed less cautious investors back into the market, as they want to secure low price entries in the event that the market resumes its uptrend.
On-chain analyst Ali Martinez noted that one technical indicator – which has appeared prior to Bitcoin rallies of 64%, 63%, and 99% – is flashing a “buy the dip” sign.
The last three times the #Bitcoin 30-day MVRV dropped below -9% in the last two years, the price of $BTC surged by 64%, 63%, and 99%, respectively.
The #BTC 30-day MVRV is currently at -11.6%, suggesting it may be time to buy the dip! pic.twitter.com/Q85skH7Hyj— Ali (@ali_charts) May 1, 2024
Another factor emboldening traders is the fact that the average entry price for spot Bitcoin exchange-traded fund (ETF) holders is approximately $57,300, according to analysts at Matrixport.
“Since the Bitcoin halving on April 20, Bitcoin ETF holders have sold $1.1bn – a sign that many ‘crypto tourists’ were trying to take advantage of the positive halving momentum,” Matrixport analysts said. “Some of those inflows are now reversing.”
While those with less conviction about the future of Bitcoin are more likely to sell, some analysts have suggested that institutional investors who started wading into the crypto waters via the ETFs could start to defend their positions, thus limiting further downside.
According to Robert Mitchnick, BlackRock’s head of digital assets, new players, including pension funds, could soon start buying the ETF, which would send Bitcoin’s price higher.
“The coming months could see financial institutions such as sovereign wealth funds, pension funds and endowments start to trade in the spot ETFs”
- Head of digital assets for BlackRock$BTC #Bitcoin #Blackrock #DigitalAsset— Altcoin Hero (@Altcoin_Hero_) May 2, 2024
“Many of these interested firms – whether we're talking about pensions, endowments, sovereign wealth funds, insurers, other asset managers, family offices – are having ongoing diligence and research conversations, and we're playing a role from an education perspective,” Mitchnick said, adding that BlackRock has been talking about Bitcoin with these sorts of institutions for several years.
ARK Invest CEO Cathie Wood said at an investor day in New York in March that once institutions arrive and start buying en masse, Bitcoin’s price could climb to $3.8 million by 2030.
“Last year we put out our bull case for Bitcoin. It was $1.5 million,” Wood said. “With this institutional green light that the SEC has provided, kicking and screaming though it did, the analysis we’ve done is that if institutional investors were to allocate a little more than 5% of their portfolios to Bitcoin, as we think they will over time, that alone would add $2.3 million to the projection I just gave you.”
Should Wood’s prediction turn out to be accurate, it would mean that Bitcoin would increase from its current price of $59,200 by more than 6,318% over the next six years.
