Will Bitcoin Crash to $49,000? Analysts Differ in Their ViewsFollowing the Fed's 50 basis point rate cut, Bitcoin prices have surged, prompting celebrations among investors. However, some analysts remain skeptical of this rally and predict a potential crash in the near future
Will Bitcoin Crash to $49,000? Analysts Differ in Their Views
Following the Fed's 50 basis point rate cut, Bitcoin prices have surged, prompting celebrations among investors. However, some analysts remain skeptical of this rally and predict a potential crash in the near future.
Cryptocurrency analyst CrediBULLCrypto, in an X post, predicted that BTC could fall below $49,000 in the short term. He believes Bitcoin might initially rise to a local high of $70,000 before crashing back below $49,000 before a breakout. He attributes the Fed's rate cut as a key factor behind Bitcoin's rise to $70,000, but warns of a potential subsequent price drop.
Another analyst, AliMartinez, suggests that the near $2 billion in open interest in Bitcoin futures contracts over the past three days could lead to a short squeeze and downward pressure. CrediBULLCrypto also mentions a "Binance spot crash manufacturing team" which, according to him, signals an impending price crash.
Martinez further points out that Bitcoin has retested the 200-day Simple Moving Average (SMA), a crucial level for confirming a bull market. Historically, Bitcoin's failure to reclaim this support has led to "major pullbacks". He believes a failure to break above the 200-day SMA could spell trouble for Bitcoin.
However, not all analysts agree that a Bitcoin crash is imminent. Crypto analyst BonkGuy believes a drastic price drop is unlikely, citing several reasons:
- Market entering the fourth quarter, a period historically associated with strong performance for risk assets. Bitcoin has historically seen its highest returns in the fourth quarter.
- Positive monthly returns for Bitcoin in October, November, and December during the past two halving cycles.
- Upcoming US Presidential Election, with 45 days remaining until Election Day. Historically, Bitcoin prices have surged after elections due to the market's desire for certainty.
- Rumours surrounding a potential victory for Donald Trump, which could push Bitcoin prices to $90,000. While the crypto community supports Trump's election, a potential price surge is possible regardless of the winner.
- Anthony Scaramucci's revelation of assisting Kamala Harris in formulating cryptocurrency policy, seen as a positive for BTC.
- FTX customers receiving $16 billion in cash as restitution following the FTX collapse. This is beneficial for Bitcoin prices as these users are likely to allocate some funds to Bitcoin.
Despite these contrasting views, Bitcoin is currently trading around $63,000, experiencing a slight decline over the past 24 hours. Trading volume has also witnessed a decrease, reaching $26.46 billion.
Overall, Bitcoin's future price trajectory remains uncertain. Investors should exercise caution, closely monitor market dynamics and pay attention to the perspectives of relevant analysts.
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