Bitcoin Price Dips Below $59K: Key Levels to Watch as Supply Shock Nears
The post Bitcoin Price Dips Below $59K: Key Levels to Watch as Supply Shock Nears appeared first on Coinpedia Fintech News
Bitcoin (BTC), the oldest and most valued cryptocurrency, fell below $59,000 over the weekend due to weak buyer activity. But don’t give up hope just yet.
Despite this drop, experts are predicting a major supply shock that could push prices higher. Bitcoin trader Mister Crypto believes this supply shock is imminent, following patterns seen after past halving events. Here are the top factors that back up his claim!
Current Market AnalysisBitcoin’s history shows a clear pattern: after each halving event, the price of Bitcoin increased significantly due to higher demand amid reduced supply. With Bitcoin’s production rate recently cut in half, this supply-demand imbalance has become more pronounced.
This time won't be any different.
A #Bitcoin supply shock is coming. pic.twitter.com/Sa3wwdyQF2
Currently, Bitcoin ETFs are absorbing the market’s available Bitcoin. This week alone, Bitcoin ETFs recorded nearly $13 million in net inflows, highlighting strong institutional interest.
Factors Driving the Supply ShockMining Competition: The halving reduces the number of Bitcoins miners receive, pushing less efficient operations out and increasing competition among miners.
Decreased Output: With daily Bitcoin output being cut, and institutional buying on the rise, the supply-demand imbalance is expected to rise. Before the halving, U.S. ETFs’ demand was already higher than daily supply, a disparity that may grow further.
Institutional Demand Surge: Major institutional players, including U.S. ETFs managed by BlackRock and Fidelity, are buying Bitcoin at a rate far surpassing daily production. ETFs in Hong Kong have also entered the market, adding more capital and increasing demand.
Bitcoin Price AnalysisBitcoin’s price is currently stabilizing in the $58,000 to $60,000 range, leading to speculation about its short-term direction. If BTC climbs to the 61.8% Fibonacci retracement level at $62,066, it may face resistance. This level aligns with a previously breached trendline and the 100-day Exponential Moving Average around $62,226, creating a key resistance zone.
If BTC cannot break through $62,066, it might drop to $57,115 and possibly fall further by 19% to test the daily support level at $49,917. However, the Moving Average Convergence Divergence (MACD) indicator suggests a bullish trend, implying that Bitcoin could continue to rise.
The Bitcoin market is heating up, and investors are bracing for volatility. With so many variables at play, it’s anyone’s guess where the price will go next.