The Bitcoin price continues to fall and analysts are sounding the alarm. Several technical and on-chain indicators suggest that the largest cryptocurrency may be heading for a new bottom around $62,000. What does this mean for the market?
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Bottom indicator points at $62,000
According to analyst Burak Kesmeci of CryptoQuant, the so-called Binance Reserve Realized Price indicator is currently giving a striking signal. This on-chain metric shows the average purchase price of all Bitcoin (BTC) held on Binance. Historically, this value has served as a dividing line between bull and bear markets.
The indicator is now around $62,000, which Kesmeci believes could indicate a new support level. Especially now that the psychological price level of $90,000 has been broken and the Bitcoin price continues to weaken. This zone has not been tested since the arrival of the Bitcoin ETFs.
Institutional capital determines the price
While in previous years the price was mainly driven by retail investors and market sentiment, the dynamics have changed recently. The influx of institutional capital and the launch of Bitcoin funds have fundamentally changed the market structure. Still, that doesn’t stop Bitcoin from potentially correcting even further.
Worrying signals from on-chain data
The increase in so-called Supply in Loss is also a cause for concern. This indicator measures how much Bitcoin (BTC) is currently below the purchase price. While the loss previously mainly occurred among short-term investors, we now see that long-term holders are also in the red.
It is striking that in previous bear markets such as 2014, 2018 and 2022, this trend often preceded the finding of a market bottom. This could indicate that the market is heading towards a low again.
Expectation: Bitcoin price to $56,000?
Julio Moreno, head of research at CryptoQuant, sees room for further decline. He estimates the eventual bottom could be somewhere between $56,000 and $60,000. According to him, it is quite possible that the Bitcoin price will fall back to that level during the course of this year.
The well-known analyst RektCapital also warns of a bearish signal. On X he points to the return of the so-called Bull Market EMA crossover, where the 21-day moving average falls below the 50-day average. In the past, this pattern has often preceded sharp corrections, including in 2014, 2018 and 2022.
Will there be a super cycle after all?
Not all experts are pessimistic. Changpeng Zhao, the former CEO of Binance, previously spoke about a possible “super cycle”. In that scenario, the four-year cycle of bull and bear markets is broken by the structural inflow of institutional money and the rise of ETFs.
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Convert your crypto into payment convenience. With the OKX Card you can pay anywhere Mastercard is accepted and receive up to 20% cashback per transaction. Don’t wait too long: this temporary crypto deal is valid until February 28.
Source: https://newsbit.nl/cryptoquant-waarschuwt-bitcoin-koers-kan-dalen-tot-56-000-dollar/
