Bitcoin slides below $29k: what to expect next
The cryptocurrency market has been on a rollercoaster ride as bitcoin (BTC) tumbles below the $29k mark, down from its 90-day high of $31,005 on April 14.
With BTC’s current market price at $28,949 as of April 20, let’s understand the factors contributing to this decline and its implications for the future.
Binance’s large sell order and surging UK inflation impact market sentiment
The recent sell-off in the crypto market seems to lack an immediate fundamental cause. However, two key events may have swayed investor sentiment.
First, an exceptionally large sell order on Binance raised concerns and added to the downward pressure on cryptocurrencies.
Second, the unexpected UK March inflation figure, which exceeded 10%, fueled worries about rising global inflation and its potential impact on digital assets.
These events likely contributed to the bearish market sentiment and further influenced the downturn in crypto prices.
Regulatory concerns and market weakness
A significant factor in bitcoin’s recent decline could also be due to growing regulatory uncertainty.
This uneasiness was exacerbated when SEC Chair Gary Gensler refused to answer whether ethereum (ETH) was a commodity during a recent oversight hearing with the United States House Financial Services Committee.
Gensler’s evasiveness might have spooked investors and contributed to the market’s bearish sentiment.
The threat of inflation and rising interest rates
Another catalyst for bitcoin’s decline is the statement from the Federal Reserve Chair, pledging to reduce inflation by hiking interest rates.
With the commitment to bring down inflation to 2%, this move will likely impact the cryptocurrency markets as investors reassess their risk tolerance in the face of changing monetary policies.
The domino effect on other cryptocurrencies
Bitcoin’s decline is not an isolated incident; other cryptocurrencies like ETH and XRP have also experienced significant drops.
Ethereum fell below $2,000 for the first time since April 13, while Ripple (XRP) suffered a nearly 6% drop in 24 hours. As the global crypto market cap falls 4% to $1.22 trillion, the entire crypto market is under pressure.
Despite the bearish sentiment, retail investors, often called bitcoin “shrimps,” have increased their holdings, now accounting for 6.7% of the entire circulating supply.
This rise in retail participation is a positive indicator of the long-term growth of the cryptocurrency market.
Bitcoin price prediction
With regulatory concerns, inflation threats, and rising interest rates, investors must remain vigilant and make informed decisions.
Despite the current bearish market, the overall outlook for bitcoin remains bullish. The BTC parabolic play is still in motion, and the current correction could be essential for the next rally.
Popular analyst Captain Faibik believes that the path to $38,000 remains plausible.
Meanwhile, in a straightforward yet informative chart analysis, two key elements have captured the attention of market observers: the range high and main support.
As the momentum builds, analysts predict that breaking above the range could propel bitcoin to new targets between $32,450 and $34,700, showcasing a promising outlook for the cryptocurrency.
Nevertheless, staying informed and adapting to ever-changing market conditions is crucial. Remember never to invest more than what you can afford to lose.