Legendary Trader Warns: Bitcoin Could Plunge Below $50,000 If These Key Levels Break
Renowned trader Peter Brandt recently provided insights on the Bitcoin price potential market movements, projecting a challenging period followed by a significant rally.
This analysis comes as Bitcoins current trading behavior exhibits signs that might concern short-term investors.
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Bitcoins Precarious Path: Potential Drop and Subsequent Rally
Brandts analysis indicates that if Bitcoin breaks the $65,000 threshold, it could trigger a further drop to around $60,000, potentially dipping as low as $48,000.
So far, Bitcoin has struggled to sustain momentum above the $70,000 mark, showing a decline of 5.6% over the past week to a current value of $67,170.
Despite the somewhat grim short-term outlook, Brandt identifies a silver lining with the potential for substantial recovery. His analysis outlines the immediate risks and hints at a rebound, which he terms the pump phase following the dump.
Chart of interest Bitcoin $BTC
Sometimes the most obvious interpretations of a chart work out, most of the time the charts morph. But the most obvious is this:
Break through 65,000, then mkt goes to 60,000
Break through 60,000 mkt goes to 48,000 pic.twitter.com/JsXXVx2EhVPeter Brandt (@PeterLBrandt) June 13, 2024
According to Brandt, this pattern typifies the volatile nature of cryptocurrency markets and could serve as a pivotal moment for investors.
Earlier in the year, he made similar observations when Bitcoin was trading at $42,300, suggesting these cycles are common features of bull markets and play a crucial role in distinguishing between novice traders and experienced investors.
JPMorgan Cautions On Bitcoin Touted ETF Demand
Meanwhile, financial institutions like JPMorgan have scrutinized the broader implications of market dynamics on Bitcoins valuation. JPMorgan has recently highlighted concerns regarding the overestimation of demand for Bitcoin ETFs.
Their analysis suggests that much of the recent inflow into Bitcoin ETFs does not represent new capital but rather a rotation from traditional cryptocurrency exchange wallets to more regulated and seemingly secure ETFs.
This shift has been driven by cost-effectiveness, regulatory protection, and deeper liquidity ETFs offer over conventional crypto wallets.
JPM SAYS #BITCOIN ETF DEMAND OVERSTATED BY 2x >
Not all of these inflows represent fresh money
entering the crypto space as we believe there has likely
been a significant rotation away from digital wallets on
exchanges to the new spot bitcoin ETFs. This is due to the
cost pic.twitter.com/l23mDv4Gmdmatthew sigel, recovering CFA (@matthew_sigel) June 13, 2024
Moreover, following the introduction of spot ETFs, there has been a noticeable decline in BTC reserves on exchanges, indicating that while ETFs are becoming a preferred vehicle for Bitcoin exposure, the overall increase in institutional demand might not be as strong as previously thought.
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JPMorgan estimates that actual net flows into Bitcoin ETFs since January stand at about $12 billion, challenging the bullish narrative of massive institutional demand.
Featured image created with DALL-E, Chart from TradingView
Source: NewsBTC.com
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