Key Points
- Bitcoin’s price has fallen to $65,891 due to a decline in demand for Bitcoin ETFs.
- Analysts predict further declines, with a potential drop to $51,000.
The cryptocurrency market experienced a brief surge after the FOMC commentary on March 20. However, following a peak at $70,000, the price of Bitcoin (BTC) has fallen back to $65,891. This is due to a decrease in demand for Bitcoin ETFs, leading to a 2.25% decrease in its trading value. The market cap of Bitcoin now stands at $1.296 trillion.
Bitcoin has seen a more than 10% decrease from its all-time high last week. Strategists from JPMorgan have warned of further declines in the near future. Meanwhile, the nine Bitcoin ETFs launched in the US have seen outflows for four consecutive days. On March 21, the net outflows from these ETFs stood at $95 million.
Overbought State and Halving Event
JPMorgan strategists have reiterated their earlier prediction that Bitcoin is in an overbought state. They expect further declines ahead of April’s halving event, which will reduce miner rewards from 6.25 BTC to 3.25 BTC. A note written by JPMorgan strategists, led by Nikolaos Panigirtzoglou, highlighted the sustained open interest in CME Bitcoin futures and decreasing ETF flows as significant bearish indicators for Bitcoin’s price.
Last month, JPMorgan predicted that the price of Bitcoin would gradually decline towards $42,000 after the euphoria around the Bitcoin halving event subsides.
Potential Price Drop
CryptoQuant CEO Ki Young Ju recently suggested that a slowdown in Bitcoin spot ETF netflows indicates a potential shift in market sentiment. If Bitcoin’s price approaches critical support levels, demand for the cryptocurrency may rebound. There has been a significant number of new whales, mainly ETF buyers, entering the market with a reported on-chain cost basis of $56,000.
According to Ju, historical data shows that corrections in bull markets typically involve a maximum drawdown of around 30%. In the current situation, this could equate to a “max pain” level of $51,000 for Bitcoin.
