Friday saw a slight decline in the crypto market, with Bitcoin falling below the key support level of $64,000.
According to Bitpush data, BTC fluctuated within a narrow range between $64,300 and $65,017 during the overnight trading session. It later dropped below $64,000 and hit an intraday low of $63,353.50 during the US stock market lunch break. As of the time of writing, it has slightly rebounded with the latest trading price at $63,873, representing a nearly 2% decrease in the past 24 hours.
Altcoins followed BTC’s consolidation, with most of the top 200 tokens experiencing more losses than gains in the past 24 hours. Fellaz (FLZ) led the gains with an increase of 11.10%, followed by Ordinals (ORDI) with a 3.14% increase and ENS with a 2.98% increase. On the other hand, dogwifhat (WIF) saw the largest decline of 9.97%, followed by zkSync (ZK) with a 7.82% decrease and Based Brett (BRETT) with a 5.87% decrease.
The overall market capitalization of cryptocurrencies currently stands at $2.34 trillion, with Bitcoin’s dominance at 53.95%.
In the US stock market, the Dow Jones Industrial Average (DJIA) closed with a preliminary increase of 0.04%, while the S&P 500 Index fell by 0.16% and the Nasdaq Composite Index dropped by 0.18%. Nvidia (NVDA.O) continued its decline, with its market capitalization falling to $3.1 trillion, below Microsoft and Apple.
Sentiment in the market is “extremely negative,” with a short-term bearish target of $60,000 for Bitcoin, according to analysts from Secure Digital Markets. They wrote in a report, “Bitcoin has recently deviated from the upward trend of the Nasdaq, mainly due to the impact of long-term holders and miners liquidating positions. Additionally, growing concerns about the nature of ETF inflows suspensions have led to this decoupling. The German government has transferred $425 million worth of BTC (possibly for sale), further adding pressure to the market.”
The outflow of funds from US-listed spot Bitcoin exchange-traded funds (ETFs) has reached its highest level since the end of April. As of this week, a total of $900 million has flowed out of these products, nearing the net outflow of $1.2 billion during the trading days from April 24 to May 2.
The subdued price movement has dampened trader sentiment. The sentiment indicator tracked by analytics firm Santiment shows that BTC’s collective sentiment has entered the “extremely negative” territory for the fourth consecutive week.
Santiment’s weighted sentiment index measures discussions about Bitcoin on social media and compares the ratio of positive to negative comments as well as the trading volume to gauge people’s overall feelings towards Bitcoin. As of Friday, the index reading was -0.73 and has been negative since May 23.
The company stated in its Friday post, “Trader exhaustion with BTC, coupled with whale accumulation, usually leads to rebounds, which is beneficial for patient individuals.”
Alex Kuptsikevich, senior market analyst at FxPro, stated in a report, “The US dollar has seen a new round of strength, and the demand for risk assets is gradually decreasing, leading to Bitcoin’s continuous decline from its intraday highs. The testing of continuous lows, such as the 50-day moving average, provides an opportunity for shorts. Their next target could be $60,000.”
Will the decline continue or will there be a breakthrough? Crypto analyst CrediBULLCrypto wrote in a post, “If this is indeed our bottom, we should see a breakout within the next 24-48 hours at most.”
He continued, “If the breakout begins now, we will find ourselves in the ‘dream long’ area, and if successful, it will be the most likely moment for a complete reversal.”
Trader and investor Mister Crypto wrote, “These charts are very similar to the charts from 2017, indicating that significant volatility in Bitcoin and altcoin season is inevitable, but patience is key. Bitcoin season seems to be very close to the bottom, and altcoin season is about to begin.”
However, analyst RektCapital issued a cautious signal on Friday morning, suggesting that BTC may further decline in the short term.
He wrote, “Yesterday, the low point resistance level was strongly rejected, leading to further declines today. Bitcoin is not ready to end its downtrend in June. But once Bitcoin is ready to reverse to the upside, this is still a downtrend line that needs to be watched for potential breakouts.”
It is worth noting that the current BTC price has retraced less than 15% from its all-time high of $73,000 in March. Neil Roarty, an analyst at Stocklytics, said, “From the perspective of BTC bulls, this small pullback and consolidation period is expected and healthy before targeting the $100,000 milestone. It depends on how the situation unfolds, and this could be a significant turning point for Bitcoin.”
Market data from cryptocurrency options shows that traders maintain a long-term bullish outlook. The call options on Deribit platform with expiration in June have strike prices of $65,000, $68,000, and $70,000, while those expiring in July have a strike price of $110,000, and those expiring in December have a strike price of $95,000.
Author: BitpushNews Mary Liu