The Bitcoin Price Tumbles as Post-Bitcoin ETF Reaction Begins
The price of Bitcoin (BTC) has fallen more than 6% from the mid-$46,000s to the mid-$43,000s following the launch of the first 11 spot Bitcoin ETFs. These new investment products saw $4.6 billion in trading volumes on Thursday, helping drive the price to fresh two-year highs above $49,000. However, profit-taking and reports of high Bitcoin miner outflows have caused a sell-off. The Bitcoin price is currently testing support levels at $44,000, and a break below this could lead to a further dip towards $42,400. While there is potential for a return to sub-$40,000 levels, long-term support from Bitcoin ETF demand, an upcoming Fed cutting cycle, and reduced supply after the halving in April are expected to prevent a significant drop.
Bitcoin Bulls Will Likely Buy the Dip
Despite the recent decline in price, there are several factors that suggest Bitcoin bulls will continue to buy the dip. The demand for Bitcoin ETFs and the anticipation of a Fed cutting cycle are expected to provide long-term support. Additionally, the reduced supply after the halving in April is likely to create tailwinds for the price. Historical patterns indicate that Bitcoin follows a four-year market cycle and rallies for around three years after each bear market. This suggests that the current bull market could see the price surpass $100,000 within the next 22 months. With positive fundamentals and strong dip buying demand, it is unlikely that bears will be able to push the price substantially below $40,000.
Hot Take: Bitcoin Price Faces Selling Pressure After ETF Launch
The approval and launch of spot Bitcoin ETFs have led to a surge in trading volumes and a rise in the price of Bitcoin. However, profit-taking and high Bitcoin miner outflows have caused a sell-off, leading to a 6% drop in the price. The Bitcoin price is currently testing support levels, and a break below $44,000 could result in further decline. Despite this, long-term support from Bitcoin ETF demand, an upcoming Fed cutting cycle, and reduced supply after the halving are expected to prevent a significant drop. Historical patterns and positive fundamentals suggest that dip buying demand will remain strong, making it unlikely for bears to push the price substantially below $40,000.
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