While Bitcoin is struggling to go back above US$60k (AU$91k) analysts at CryptoQuant have dampened hopes of a quick recovery. In a memo shared with Crypto News Australia the analysts note a slowing demand for BTC following the close of Q1.

They cite a decrease in holders and whale demand as well as reduced interest in Spot ETFs. Supply pressures are amplified by selling from miners and a ‘bearish futures market’.

Related: Analysts React to Bitcoin Dip Below $60k Amid US Rate Freeze, How Low Can It Go?

While the cost basis for traders – the average price at which traders purchased their Bitcoin holdings – is US$63k (AU$96k), they note a valuation of BTC between US$55k-$57k (AU$83k-AU$86k). This is below traders’ cost basis and also provides ‘the ultimate support for prices during bull markets’.

Therefore, this could potentially lead to increased selling pressure and further downward movement in the price of Bitcoin.

Bitcoin Faces Selling Pressure Amidst Slowing Demand, source: CryptoQuant

Reduced Enthusiasm and Further Outlook

In addition, the analysts said that the Bitcoin market is experiencing reduced buying interest, evident through negative Coinbase premiums and decreased leverage in future positions. Growth in demand from large investors (whales) has slowed, negatively impacting price rallies.

Furthermore, substantial sell-offs by miners have added to the supply influx, weakening price supports. The recent price decline is attributed to traders opening short positions, anticipating further declines.

As mentioned, CryptoQuant sees prices dropping even further, substantially lower than traders’ cost basis. However, this does not mean the bull market is over. This may well be a much-needed correction after going up for months.

Trader Titan of Crypto says the Pi Cycle Top indicator currently indicates that a cycle top is not imminent, diverging from some market sentiments calling for the beginning of a bear market.

Pi cycle top, source: Washigorira via TradingView

Related: Market Analyst Pav Hundal Looks at Where Bitcoin May Be Heading Next

This indicator examines the relationship between the 111-day moving average (MA111) and the 305-day moving average multiplied by 2 (MA305*2) in Bitcoin trading.

Despite some bearish forecasts, many traders are exercising caution and awaiting the crossover of the MA111 above the MA305*2 as a significant confirmation signal before making any decisive conclusions about Bitcoin’s market trend.

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The post Bitcoin Struggles Below $60K Amid Decreased Demand; Analysts Weigh In appeared first on Crypto News Australia.

Filed under: Bitcoin - @ May 3, 2024 2:57 am