Bitcoin (BTC) has added 3.0% to reach $66,500.
While it briefly touched $67,212, it appears to be struggling to fully recover
from a drop earlier in April.
Investor sentiment towards crypto assets
remains cautious, with a decrease in stakes observed. The ProShares Bitcoin
Strategy ETF (BITO) reported a net capital outflow of $142.8 million last week,
marking the largest outflow in its history. This followed the $112.9 million
outflows reported in the previous week. Meanwhile, IBIT from BlackRock and FBTC
from Fidelity saw consolidated net inflows of $285.8 million, while GBTC from
Grayscale experienced net outflows of $578.8 million. Together, the three major
spot Bitcoin ETFs lost $293.0 million last week. Although this week shows a
slight improvement with net inflows of $34.3 million in spot ETFs, the inflow
amount remains relatively small and could easily be offset by negative news,
potentially causing BTC to test the $60,000 support level once again.
The long-awaited Bitcoin halving occurred on
April 20, sparking a post-halving rally. Historically, Bitcoin prices have
surged by around 75.0% within five months after a halving event. As a result,
Bitcoin could potentially rise from $64,700 to $113,000 by September 20. Many
investors are holding onto Bitcoin, unwilling to miss out on this opportunity. Strong
external shocks such as a risk of a nuclear war in the Middle East or market
turmoil could trigger significant sell-offs.
Speculation about a possible pullback in the
U.S. stock market in May is also affecting investor sentiment towards
cryptocurrencies. Should such a pullback occur, it would exert additional
pressure on cryptocurrencies, potentially causing Bitcoin to drop to $60,000.
However, any Bitcoin dips would likely be quickly bought out unless there is a
strong correction in the stock market.
Further complicating the market outlook is the
potential return of Mt. Gox assets to the market in May. Analysts warn that the
return of over $9.2 billion worth of Mt. Gox-era Bitcoin could disrupt the
market and negatively impact Bitcoin prices. This return could become another
wildcard for the crypto market, either supporting existing market trends or
leading to a decline, depending on market dynamics. If no sell-offs occur in
May, Bitcoin may resume its climb towards $78,000-80,000 in June-July. However,
in the alternative scenario, the strength of the support at $60,000 would
determine the extent of the decline, with the worst-case scenario suggesting a
drop to $46,000-50,000.