- Bitcoin’s recent drop has led to the liquidation of leveraged long bets. However, one analyst believes this could be an opportunity to accumulate, based on historical patterns of pullbacks followed by impressive recoveries.
- The analyst shared a chart indicating that Bitcoin is within historical retracement ranges, which usually precedes a sharp price increase.
- Despite the current bearish outlook, some analysts remain positive, citing the United States Federal Reserve’s reduction of Quantitative Tightening (QT) runoff as a potential boost for Bitcoin prices.
As Bitcoin’s price drops, one analyst sees an opportunity to accumulate, citing historical patterns of pullbacks and recoveries. Despite bearish outlooks, some remain positive, citing the Federal Reserve’s reduction of QT runoff as a potential boost for Bitcoin prices.
Time To Load The Bitcoin Dip?
The analyst shared a chart indicating that Bitcoin is within historical retracement ranges. Whenever this happens, prices tend to bounce back sharply, much to the relief of holders. Solid data back this assessment. The analyst said that since Bitcoin bottomed at $15,500 in 2022, there have been four distinct pullbacks, all within the -20% to -23% range. For the savvy, the trader continued, each of these downturns presented an opportunity to accumulate at a discount.
Shrinking Spot ETF Inflows, United States Federal Reserve Turns Dovish
Though optimism reigns, the possibility of BTC crashing below the $52,000 and $50,000 support levels cannot be discounted. This outlook, though bearish, is also backed by data. For instance, on May 1, spot Bitcoin exchange-traded funds (ETFs) redeemed $563.7 million worth of BTC. In the past, when the coin was flying from February to mid-March, inflows were hundreds of billions. Now that there is a marked spike in outflows, it suggests that sellers are in control and spot ETF holders are panicking and looking to exit.
Positive Outlook Despite Negative Sentiment
Despite the negative sentiment and predictions of Bitcoin melting to $52,000, another analyst remains positive. Citing the United States Federal Reserve reducing Quantitative Tightening (QT) runoff from $65 billion to $45 billion, the analyst continued that Bitcoin prices might benefit from the “dovish” environment. Of note is that the central bank said it is unlikely to hike interest rates. Instead, they look to slash rates when supportive data is showing that inflation is falling towards the 2% benchmark level. Currently, inflation remains high but lower than the 2021 averages.
Conclusion
While Bitcoin’s recent price drop has caused concern among some investors, others see it as an opportunity to accumulate. Historical patterns suggest that such pullbacks often precede sharp price increases. Despite the bearish outlook, some analysts remain positive, pointing to the Federal Reserve’s reduction of QT runoff as a potential boost for Bitcoin prices. However, the situation remains fluid, and investors should monitor developments closely.
