- With the spot Bitcoin ETF hype gradually declining from the crypto industry, crypto experts are convinced a Bitcoin price correction is more likely to happen before a pre-halving rally materializes.
- Bitcoin dominance has already formed a reversal pattern as more investors double down on the altcoin market in anticipation of an altseason in the near term.
Bitcoin (BTC) price is fast approaching the apex of the consolidation that began in early December last year and a breakout on either side could take place amid increased uncertainty in the near term. Heightened on-chain activity has been observed since the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States last week.
Despite the notable cash inflows recorded in the spot ETFs, several large transactions have been observed leaving unknown wallets to known wallets controlled by centralized exchanges like Coinbase Global, Binance Holdings, and Bitstamp. As of this report, the Grayscale Bitcoin Trust (GBTC) has registered the highest cumulative trading volume of about $6.5 billion and also the largest cash outflows of approximately $1.63 billion.
Worth noting that the largest Bitcoin transaction for the past six months was recorded on Wednesday, whereby one involved coins worth about $665 million. The high on-chain activity has coincided with a high number of Bitcoin supply, amounting to around 83 percent, that are in profit levels. Ideally, a high level of Bitcoin supply in profit is perceived as a bearish sentiment and a high-risk zone in the near term.
Nonetheless, the approval of spot Bitcoin ETFs is a bullish event in the long term as more investors will get exposure through the respective fund managers.
Experts’ Take on Bitcoin Price Analysis
Having struggled to rally beyond the psychological resistance level around $44k after retracing from the spot ETF-induced pump last week, crypto experts are more inclined to a price correction before a bullish continuation. Bitcoin’s short-term bearish sentiment is bolstered by the weekly reversal pattern that has been forming in the recent past.
Notably, Bitcoin price has been forming higher highs since the October 2023 breakout but the Relative Strength Index (RSI) has been indicating a bearish divergence. Nonetheless, Bitcoin’s macro bullish outlook is bolstered by the first weekly golden cross between the 50 and 200 Moving Averages (MA)
“Several on-chain metrics and indicators still suggest the price correction may not be over or at least that a new rally is still not on the cards. Short-term traders and large bitcoin holders are still doing significant selling in the context of a “risk-off” attitude. Additionally, unrealized profit margins have not fallen enough for sellers to be exhausted,” CryptoQuant analysts noted.
Closer Look at BTC Price Action and Market Picture
As Bitcoin price continues to range in a horizontal consolidation, the daily average trading volume has significantly dropped in the past few weeks from over $55 billion to around $14.5 billion on Thursday. With Bitcoin dominance threatening to dip below 50 percent in the near term, crypto experts believe an altcoin rally could materialize in the near term.
Meanwhile, Bitcoin price has dropped about 9 percent in the past seven days to trade at (see chart below)
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