A merciless bear market over the past month has crushed Bitcoin (BTC), whose price dropped 20% from its record highs. Still, within the devastation, there are flashes of hope since eminent analysts see a possible bottom emerging around the current $57,000 area.
Tough Opening Month For Bitcoin
May has not been kind to Bitcoin at start. Once-dominant cryptocurrency has been steadily declining and falling down to levels last seen in March before its explosive rise to $73,700. With this most notable cycle drop in price, questions over a protracted bear market are raised.
Beyond Bitcoin, the suffering is felt in the larger altcoin market as well. Mirroring the declining trend, Litecoin (LTC), the silver to Bitcoin’s gold, lost a shockingly 25% of its value in the past month. Although Litecoin appears to be bound to the fate of its big brother in this present downturn, traditionally it was seen as a more steady substitute for Bitcoin.
Finding The Bottom: Bullish Predictions Surface
From the crypto analytic community, a chorus of hope is developing even with the general gloom. Several heavyweight analysts think Bitcoin may have established itself between the present price range of $56,000 to $58,000.
Popular crypto analyst Rekt Capital notes a historical pattern whereby similar 20% declines have been followed by notable rebounding. Another esteemed voice, Michaël van de Poppe, shares this view, implying Bitcoin might be approaching the end of its phase of price stabilization. He issues warnings about possible short-term swings but emphasizes the $56,000 to $58,000 zone as a key support level.
This is officially the deepest retrace in the cycle (-23.6%)$BTC #BitcoinHalving #Bitcoin pic.twitter.com/Gcapbl0Nu6
— Rekt Capital (@rektcapital) May 1, 2024
Uncertainty Looms As Market Awaits Fed Decision
Although expert hope is encouraging, the crypto market is clouded with uncertainties. The forthcoming Federal Reserve interest rate decision has great influence on investor mood and, thus, the direction of Bitcoin’s price. While a dovish posture might offer the tailwind required for a Bitcoin bounce, a more hawkish posture from the Fed could set off more selling.
Related Reading: Ethereum Fees Dive: Will This Spark A Surge In Network Activity?
Buckle Up For A Bumpy Ride
For Bitcoin and the other cryptocurrencies, the next several weeks will be vital. The short-term path will probably be dictated by the Federal Reserve’s choice as well as investor response to the present price decline. Although optimistic attitude points to a possible turn-around, the natural volatility of the crypto market implies investors should get ready for a wild ride.
Bitcoin market cap currently at $1.13 trillion. Chart: TradingView.com
Featured image from Pixabay, chart from TradingView