Bitcoin price is facing a precarious moment this week amid growing risk of the elongated correction from $70,000 reaching critical support at $60,000. As the market becomes more unstable, irrational selling due to panic may worsen the situation leading to a bloodbath as altcoins join the fall.
The largest digital asset risks sliding to $50,000 ahead of the grand recovery likely to shape the bull run in the second half of 2024.
Altcoins have seen their value slashed in equal measure, with Ethereum price barely holding onto support at $3,500. Solana may close the day below the $130 level if bulls fail to arrest the bearish situation in time.
According to CoinGecko data, the total market cap is down 3.3% to $2.45 trillion. Bitcoin dominance is at 51.2% while Ethereum comes second at 17.4%.
Bitcoin Price Nosedives, Crypto Fear And Greed Index Hits 63
The euphoria witnessed in the market in May is slowly fading. Bitcoin bulls covered significant ground last month from support at $56,000 and almost tapped an all-time high before suddenly stopping at $72,000.
As sentiment shot up thanks to the approval of Ethereum ETFs in the US, the fear and greed index climbed to 74. Such a move depicts a stronger bullish front, igniting FOMO and therefore creating euphoria among investors.
However, the crypto market has from last week performed dismally. The persistent price drop can be attributed to the hawkish stance of the Federal Reserve on interest rate cuts despite easing inflation.
Miners are also reported to be facing capitulation, thus closing shop and selling their BTC stack. This situation follows the halving in April which slashed rewards per block of Bitcoin mined from 6.25 to 3.125 BTC.
The uptick in selling pressure coupled with negative sentiment and failing support levels, paints a grim picture picture for Bitcoin, especially in the weekend ahead.
Bitcoin Price Analysis Growing Uncertainty
Bitcoin price perdition reveals the Money Flow Index (MFI) indicator monitoring the flow of money in and out of BTC markets is falling sharply toward the oversold region. This implies that traders are willing to sell BTC against other currencies and other digital assets than buy in, thus, creating intense headwinds.
Two death cross patterns formed on the four-hour chart escalate the bearish landscape. The black horizontal band signifies a critical support area. Bitcoin price must defend this support otherwise, the correction might continue to $60,000.
Based on the Fibonacci retracement applied to the chart, bulls have a fighting chance at $62,000 highlighted by a ratio of 0.618.
Considering support levels at $62,000, $60,000 and $58,000 have been broken before in April and May, it might be prudent to prepare for an extended bearish market to $56,000 while not ruling out $50,000.
Nevertheless, this might not be the end of the road for Bitcoin bulls as the Ethereum ETF will likely start trading on July 2. If it so happens, this may bring relief to investors, paving the way for a strong upswing to $70,000. Perhaps a break above the all-time high of around $73,000 is what Bitcoin needs to trigger FOMO ahead of its anticipated rally to $100,000 in 2024.
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