Bitcoin Crash Incoming? 📉 $70K Warning! 🚨
Crypto
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Alex Thorn, research lead at Galaxy Digital, observes that Bitcoin’s price could descend to a gap around $70,000. He notes a lack of substantial buying pressure from major investors and long-term holders, a pattern historically seen at the bottom of prior bear markets. Bitcoin’s price currently aligns with the 200-week moving average at $58,000, a level that has previously signaled cycle lows. While the US Senate’s consideration of a crypto market structure bill is being monitored, Thorn suggests diminished chances of its passage. He posits that any positive impact from the legislation would likely benefit alternative cryptocurrencies rather than Bitcoin itself, reflecting a continued focus on broader market dynamics.
Bitcoin Faces Prolonged Downturn as Key Catalysts Remain Absent
Bitcoin (BTC) is facing a prolonged downturn, according to Galaxy Digital research lead Alex Thorn, who anticipates a potential fall to the $70,000 gap in supply before testing its realized price of $56,000. Thorn’s analysis, released on Monday, highlights the lack of catalysts driving a turnaround for the cryptocurrency. Bitcoin’s price has climbed 3% to just under $78,500 following a recent dip from a nine-month low, yet it remains down 39% from its all-time peak of over $126,000 achieved in early October (as tracked by CoinGecko). This significant decline underscores the prevailing bearish sentiment within the market.
Historical Patterns Point to a Potential Bottom
Thorn’s assessment is rooted in historical trading patterns. He notes that Bitcoin has historically traded below its realized price during the bottoms of previous bear markets, typically finding support “around or slightly below” this level before rebounding. Specifically, Bitcoin lost support at its 50-week moving average in November, currently sitting at $58,000, while its 200-week moving average remains at $58,000. These levels have historically acted as “cycle bottoms” and presented “strong entry points for long-term investors.” This suggests that the current price decline may represent a favorable opportunity for patient investors.
Long-Term Holder Behavior Signals a Potential Turnaround
A key element of Thorn’s analysis centers on the behavior of long-term holders. He observes a notable decline in their sales, indicating “significant profit taking.” “Little evidence of significant accumulation” from large buyers further reinforces this view, suggesting that buyers are potentially waiting for higher prices before selling, creating resistance to price gains. However, Thorn emphasizes that “the recent decline in long-term holder realized profit taking is notable and should signal we are closing in on a bottom.” This shift in behavior is a crucial indicator for the market.
Regulatory Uncertainty Dampens Near-Term Catalysts
While the passage of a US Senate crypto market structure bill could act as a near-term catalyst, Thorn believes the odds of its passage have diminished due to waning bipartisan support and a stalled Senate Banking Committee. He notes that “any positive momentum generated by passage is more likely to yield benefit to altcoins than BTC.” This regulatory uncertainty adds another layer of complexity to the market’s outlook, suggesting that the primary catalyst for a bullish reversal is likely to come from alternative cryptocurrencies rather than Bitcoin itself.
This article is AI-synthesized from public sources and may not reflect original reporting.