In a recent Bitcoin price prediction, fund manager Andrew Kang issued a stark warning about the potential for a May 2021-style crash.
Kang highlighted the market’s current vulnerability due to a prolonged trading range and high levels of crypto leverage. His analysis suggests that if Bitcoin breaks below this four-month range, the market could face a significant downturn, potentially driving prices down to the $40,000s.
This scenario would mirror the dramatic correction experienced in May 2021, which saw Bitcoin and other cryptocurrencies sharply decline after a period of rapid gains.
Most market participants are not appreciating the significance of a potential loss of a 4-month range on Bitcoin
The closest parallel we can draw is to that of the range of May 2021 where we also came off a parabolic rally of BTC and alts
$50B+ of crypto leverage here is… https://t.co/R3qAcCajAC pic.twitter.com/B4bpeoZwxo
— Andrew Kang (@Rewkang) July 3, 2024
Bitcoin Price Drops Below $54,000 Due to Mt. Gox Repayment Plan
Bitcoin recently fell below $54,000, driven by Mt. Gox’s transfer of $2.7 billion worth of BTC to a new address. This transfer is part of preparations for a $9 billion repayment to creditors starting in July, causing market anxiety.
Over the past week, Bitcoin has dropped nearly 12%, with 7.5% of the decline occurring in the last 24 hours. The broader cryptocurrency market has also been affected, with Ethereum slipping below $3,000 and Binance Coin trading around $470.
Key points:
Bitcoin currently trading above $54,000 but remains volatile. Market sensitivity to large movements highlighted by recent fluctuations. Broader cryptocurrency market also experiencing declines.In summary, the Mt. Gox transfer and upcoming repayments have caused significant market anxiety, leading to Bitcoin’s price crash below $54,000, reflecting the ongoing volatility and market sensitivity.
How a Weaker USD and Anticipated Fed Rate Cuts Affect Bitcoin
The US dollar has continued to weaken, slipping further as markets increasingly anticipate interest rate cuts by the Federal Reserve in September and possibly again in December.
This trend follows weaker US economic data, leading the USD to decline for the fourth consecutive day, hitting its lowest level in over three weeks. This weakening dollar provides significant support to the cryptocurrency market, making assets like Bitcoin more attractive.
Traders are eagerly awaiting the US Non-Farm Payrolls (NFP) report, which will influence Federal Reserve interest rate decisions. Analysts predict the report will show the US economy added 190,000 jobs in June, down from 272,000 in May.
The unemployment rate is expected to remain steady at 4%, indicating labor market stability. However, Average Hourly Earnings growth may slow slightly to a 3.9% annual increase, down from 4.1% in May.
Key points:
USD’s decline offers support to crypto market. NFP report crucial for future Fed rate decisions. Anticipated Fed rate cuts could boost Bitcoin as an alternative asset.These figures will be closely watched for insights into the US economy’s health and the potential implications for Federal Reserve policy. The weaker US dollar and anticipation of Fed rate cuts could support Bitcoin (BTC) prices as investors seek alternatives amid economic uncertainty.
Bitcoin Price Prediction
Bitcoin (BTC) is trading at $53,980, down 4.62%. On the 4-hour chart, the pivot point stands at $55,180. Immediate resistance levels are $57,090, $58,510, and $60,220.
Immediate support is at $53,140, with further support at $51,720 and $49,910. The Relative Strength Index (RSI) is at 17, indicating extremely oversold conditions.
The 50-day Exponential Moving Average (EMA) is at $60,510, suggesting a bearish trend as long as prices remain below the pivot point.
A break above $55,180 could signal a shift to bullish momentum, while staying below this level maintains the bearish outlook.
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