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On March 17th, Bitcoin once again experienced a major drop, briefly falling below the $65,000 mark with the largest intraday decline exceeding 6%. CoinGlass data shows that within the past 24 hours, a total of 166,200 people were liquidated in the cryptocurrency market, with a total liquidation amount of $532 million.
Since the beginning of this year, the price of Bitcoin has been steadily rising, with March seeing consecutive all-time highs. According to CoinGlass market data, Bitcoin reached a peak of $73,881.30 on March 14th. However, following this, Bitcoin prices experienced significant consecutive pullbacks, with the price dropping to around $66,500 at the time of writing.
In terms of Bitcoin's future trend, institutions hold different views. Analysts from Bernstein, a well-known investment management and research company in the United States, believe that the upward trend of Bitcoin has just begun and expect it to rise to $150,000 by mid-next year. However, JPMorgan has issued a warning, suggesting that the price of Bitcoin could plummet to $42,000 per coin, representing a potential downside of over 36% from the current price.
Bitcoin Witnesses Another "Cliff Dive", Over 166,000 Liquidated
On March 17th, Bitcoin plummeted during the trading session, briefly falling below the $65,000 mark, with the lowest reported at $64,750, marking an intraday decline of over 6%.
As a result, the entire cryptocurrency market experienced significant adjustments. At the time of writing, Bitcoin had fallen by 3.74% within the day, trading at $66,471; Ethereum was trading at $3,567, down 4.25% within the day, briefly falling below $3,500; and Dogecoin dropped by 9.61%.
CoinGlass data shows that within the past 24 hours, a total of over 166,200 people were liquidated in the cryptocurrency market, with a total liquidation amount of $532 million.
Since the second half of last year, the price of Bitcoin has been steadily rising. Starting from February this year, the price of Bitcoin has accelerated, rapidly surpassing $70,000 from below $40,000.
Starting from February 28th, within half a month, Bitcoin successively surpassed $60,000, $67,000 thresholds, and on the evening of March 5th, it broke through $69,000, reaching an all-time high for the first time. On the evening of March 8th, Bitcoin surpassed $70,000 during the trading session, and on March 11th, it successively broke through $71,000 and $72,000 thresholds. On March 12th, during the trading session, Bitcoin surpassed $73,000. On March 14th, Bitcoin soared to $73,881.30 during the trading session, setting a new all-time high.
Market analysis suggests that the logic behind this wave of Bitcoin's rise is relatively clear.
Firstly, the issuance of Bitcoin spot ETFs has brought more incremental funds to the market. On January 11th, 2024, the U.S. Securities and Exchange Commission formally approved 11 Bitcoin spot ETF applications, including institutions such as BlackRock. Since its listing, Bitcoin ETFs have been rapidly attracting funds. According to FarsideInvestors data, as of March 12th, Bitcoin spot ETFs have accumulated a net inflow of $10.1 billion since their launch. This inflow rate fully reflects the market's strong interest and demand for Bitcoin ETFs, driving the spot Bitcoin price higher.
Secondly, bullish factors such as the "halving" are fermenting. It is understood that Bitcoin "halving" refers to the halving of mining rewards, which occurs approximately every 4 years, depending on the block generation speed of the Bitcoin network. This will reduce the supply of Bitcoin. It is expected that on April 23, 2024, the block reward will decrease from 6.25 (BTC) to 3.125 (BTC).
In addition, expectations of a mid-year interest rate cut by the Federal Reserve have further fueled the frenzy of Bitcoin prices. A report released earlier by Goldman Sachs showed that the Federal Reserve will start a substantial interest rate cut in 2024, with at least four rate cuts, starting in June.
Divergence in Future Trends
However, after hitting a historical high on March 14th, Bitcoin has experienced consecutive corrections in recent days, with the highest retracement exceeding 12%.
Regarding the future trend of the Bitcoin market, there are also differences among market institutions.
Analysts from Bernstein, a well-known investment management and research company in the United States, believe that the upward trend of Bitcoin has just begun and expect it to rise to $150,000 by mid-next year.
"We have built a flow model of institutional Bitcoin in our estimation to derive the price of Bitcoin. We estimate that the Bitcoin market will flow into $10 billion in 2024 and another $60 billion in 2025."
Since Bitcoin ETFs were approved by regulators in January this year, their inflow has exceeded $9.5 billion, further strengthening Bernstein's confidence in Bitcoin steadily rising to $150,000. In the past 30 days alone, Bitcoin ETFs have averaged a daily inflow of $370 million.
"At this rate, the inflow of Bitcoin ETFs in the remaining 166 trading days of 2024 will exceed our expected inflow for 2025." analysts added.
However, JPMorgan believes that the upcoming Bitcoin halving event in April may have a severely negative impact on the profitability of Bitcoin miners.
The report warned that the price of Bitcoin could plummet to $42,000 per coin as a result, representing a potential downside of over 36% from the current price.
JPMorgan analyst Nikolaos Panigirtzoglou estimates that the hash rate of the Bitcoin network will decrease by 20% after the halving, leading to an increase in the estimated production cost and base price of Bitcoin.
Michael Hartnett, chief investment strategist at Bank of America, said that with the record-breaking surge in the so-called "fabulous seven stocks" in the technology industry and the historical highs of cryptocurrencies, the market is showing signs of a bubble. |
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Post time 27-3-2024 22:49:15