Key Points
- Bitcoin (BTC) price briefly surpassed $59K, driven by increased activity from large-scale investors.
- Fear of further crypto market downturn persists, with Bitcoin’s fear and greed index dropping to 28 percent.
The price of Bitcoin (BTC) saw a 2 percent increase in the last 24 hours, briefly exceeding $59K during the early European session on Wednesday. The leading cryptocurrency, however, struggled to surpass the 200-daily Moving Average (MA) after consistently closing below this level in recent days.
The crypto industry continues to worry about potential further market downturn. The fear and greed index of Bitcoin was around 28 percent on Wednesday, a significant drop from 44 percent the previous week.
Bearish Sentiment and Whale Activity
Bitcoin’s price signaled a midterm bearish sentiment after closing below $61K last week, confirming a potential double top backed by a bearish divergence on the weekly Relative Strength Index (RSI). As such, unless Bitcoin reclaims the support level around $61k in the upcoming weeks, a further drop towards $48K could be inevitable.
Following a significant resistance level of around $73k for Bitcoin, heightened on-chain activity was noted in the past few weeks, primarily driven by large-scale investors. For instance, one such investor bought 10K Bitcoins amid the recent market downturn.
Institutional Investments and Government Sales
US-based spot BTC ETFs have seen a net cash inflow of over $600 million in the past three days, led by BlackRock’s IBIT. This shows that more institutional investors are accumulating Bitcoins despite price volatility.
In contrast, the German government has been selling off its Bitcoin holdings for the past three weeks, reducing its initial holdings by more than half. According to on-chain data analysis, the German government currently holds about 23.96k Bitcoins, worth approximately $1.4 billion.
In the meantime, repayments from the defunct Mt. Gox are expected to continue in the next three months, with around $16 billion expected to be distributed to creditors.
Economic Expectations
Despite mainstream web3 adoption led by institutional investors, the crypto industry continues to correlate with the stock market. However, the crypto industry is anticipating a major bullish breakout if the U.S. Fed initiates interest rate cuts later this year. The upcoming US CPI data and PPI data will provide further insight into the economic outlook.
The upcoming US general elections have been described as a potential bullish trigger for the entire crypto industry. The subject of crypto has already emerged as a significant topic in the presidential campaigns on both sides of the political spectrum.
Long-term Predictions
Bitcoin’s price is following a macro-rising trend similar to the 2017 bull run that ended in early 2018. Although the price of Bitcoin may drop as low as $48k in the coming weeks, most analysts believe the digital asset will finish this year trading at least at $100k.
Furthermore, the upcoming listing of spot Ether ETFs in the United States is expected to trigger further cash inflows into crypto investment products.
