Bitcoin recently experienced a significant drop of more than 15% from its mid-March peak, falling to a ten-day low of under $62,000. Analysts have noted that despite the completion of the halving, Bitcoin continues to display red candles, indicating a correction in the market. The uncertainty surrounding the current geopolitical and macroeconomic situation has added to the insecurity among investors.
A correction after a period of solid gains is considered necessary in any market. Factors such as war, recession fears, inflation, and reduced ETF buying have all contributed to the negative sentiment in the market. Analysts have identified key support levels at $60K, $56K, and $52K, with each level becoming more likely if the one above it is breached. The short-term outlook for May suggests a potential uptrend within the correction range, with a breakout possible under stable market conditions.
This week, the Federal Reserve is expected to announce its interest rate decision, with rates likely to remain unchanged amid higher-than-expected inflation projections. This decision could further accelerate the market correction, potentially pushing Bitcoin below its immediate support level of $60K. Traders are advised to exercise caution, as a weakening economy coupled with rising inflation could spell trouble for the market.
Despite the gloomy short-term sentiment, some analysts remain optimistic about the market. Glassnode data reveals that retail Bitcoin holders, often referred to as “degenerates” by some, are stacking sats once again. Accounts holding less than 1 BTC are accumulating coins at a rate of 12,200 per month. Corrections are viewed as healthy parts of market cycles, presenting opportunities for investors to buy the dip. The depth and duration of the current correction remain uncertain, but opportunities for growth may arise in the future.
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