Bitcoin and other cryptocurrencies have generally attracted attention in recent years by exhibiting average or downward trends in the 2nd and 3rd quarters. With just hours left until the halving, BTC mining will become more costly, so miners may be tempted to sell their assets.
Elja in the article X cryptocurrency It provides a clear view of the current state of the market, highlighting five key factors that could signal a potential decline in Bitcoin and crypto prices.
Possible Reasons for the Fall of Bitcoin and Crypto:
1. End of BTFP Program
Elja begins his analysis with the termination of the Bank Term Funding Program (BTFP), the Federal Reserve’s emergency lending program. Following the collapse of Signature Bank and Silicon Valley Bank, BTFP’s new loans expired and significant market liquidity disappeared. This decision could have short-term negative effects, but the Federal Reserve tends to print more money, which could mitigate the impact.
2. Delay in Interest Rate Cuts
Then, in his article, X discusses the interest rate cut expectations that are stimulating the stock and crypto markets. Higher-than-expected CPI statistics and Federal Reserve Chairman Powell’s comments on long-term interest rates dampened bullish expectations. However, the 2024 interest rate cut raises concerns, especially for risky assets such as Bitcoin.
3. Slowing ETF Inflows
Elja points out that there has been a significant shift in cryptocurrency ETF flows, with inflows slowing as institutional interest declines. This trend is particularly evident when outflows consistently exceed inflows. Bitcoin ETFIt is evident in . This decline in institutional participation may indicate declining confidence in the market’s prospects.
4. Uncertainty Due to War Situation
We all know about the ongoing geopolitical tensions between Iran and Israel, and many analysts view this tension as market uncertainty. However, Elja underlines that there may be significant fluctuations in the markets due to the statements or actions of either party. Recent market reactions to similar events underscore the importance of geopolitical factors in shaping investor sentiment.
5. Historical Trend and Halving Effect of Bitcoin
Summarizing his analysis, Elja says that Q2 and Q3 are generally average or bearish for Bitcoin and crypto. As mining costs increase with the upcoming halving, miners may sell more. Similar to the previous 2016 and 2020 halving cycles, these variables can often take several months to settle.
As a result, the analyst advises investors to stay focused and be ready to buy the dip. Experienced crypto investors see this market recession or downturn as an opportunity to buy more assets at lower prices. They expect significant growth in the future, with Bitcoin potentially reaching $150k, Ethereum reaching $12k, and many altcoins gaining 50x to 100x gains.
