As Bitcoin falls, liquidating leveraged long bets along the way, one analyst, in a job on X, thinks this could be a great opportunity to accumulate, citing historical patterns of pullbacks followed by impressive recoveries.
Time to charge the Bitcoin Dip?
The analyst shared a chart indicating that Bitcoin is within historical retracement ranges. Whenever this happens, prices tend to rebound sharply, upward, much to the relief of holders.
Robust data supports this assessment. The analyst said that since Bitcoin hit a 2022 low of $15,500, there have been four separate pullbacks, all between -20% and -23%. For the more savvy, the trader continued, each of these downturns presented an opportunity to accumulate at a discounted price.
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Therefore, if history matches this overview, Bitcoin may be available at a discount to spot rates. At spot rates, the coin is down about 23% from the all-time high of $73,800 reached in mid-March.
No one knows how prices will print in future sessions. However, looking at the candlestick layout, BTC has resistance in the $60,000 to $61,000 area. A sharp break above this area could solidify the analyst’s view, triggering the start of another leg that could pull back $74,000 in the coming weeks.
Spot ETF Inflows Decrease, US Federal Reserve Becomes Dovish
Although optimism reigns, the possibility of BTC falling below the $52,000 and $50,000 support levels cannot be ruled out. This outlook, while bearish, is also supported by data.
For example, on May 1, Bitcoin exchange-traded funds (AND F) bought back $563.7 million worth of BTC. In the past, when the coin was flying from February to mid-March, inflows were in the hundreds of billions.
The enthusiasm was palpable even with Grayscale liquidating GBTC, thereby reducing BTC. Now that there is a sharp rise in outflows, this suggests that sellers are in control and spot ETF holders are panicking and looking to exit.
Despite negative sentiment and predictions that Bitcoin would melt to $52,000, another analyst remains positive. Citing the US Federal Reserve reducing the quantitative tightening (QT) run-off from $65 billion to $45 billion, the analyst added that Bitcoin prices could benefit from the “accommodative” environment.
It is worth noting that the central bank has stated that it is unlikely to raise interest rates. Instead, they consider cutting rates when favorable data shows inflation falling toward the 2% benchmark. Currently, inflation remains high but below 2021 averages.
Featured image from Canva, chart from TradingView
