The cryptocurrency market saw a significant correction as Bitcoin (BTC) plunged below $67,000 to hit a low of $62,460 amidst the turmoil. Currently, optimists are eyeing the $62,000 support level, potentially pushing Bitcoin below the $60,000 threshold, waning optimism.
Altcoins have been hit hard by a downward trend, falling 20-40% from their recent highs. Investors worked hard to secure profits while waiting for a period of stability amid market turmoil.
Data from Coinglass shows that long positions were hit the hardest during this decline. Bitcoin’s relentless rise over the past few weeks led many traders to believe it was in a one-way trajectory, only to be met with a significant correction.
On Monday, spot Bitcoin exchange-traded funds (ETFs) experienced negative flows for the first time since March 1. This was primarily due to the outflow of $642.5 million from Grayscale’s GBTC, the largest single-day outflow on record.
GBTC saw total outflows exceed $12.4 billion, while BlackRocks IBIT recorded inflows of $12.96 billion, according to Farside data. These ETFs have a combined net flow of $12 billion and currently hold 836.6k BTC worth approximately $53.1 billion.
Despite some skepticism about the sustainability of the current bull cycle, the upcoming halving, which is still over 30 days away, suggests otherwise. Historical trends indicate that the peak cycle typically occurs 6 to 9 months after the halving.
Although ETF inflows have been notable, many investment advisors have yet to advocate a Bitcoin allocation to their clients. Grant Engelbart, vice president and investment strategist at the Carson Group, points out that very few advisors have allocated to Bitcoin ETFs, with the average allocation being 3.5%.
Analysts expect this halving to be the next significant catalyst for Bitcoin and the broader cryptocurrency market, with prices expected to move sideways until then.
Henry Robinson, co-founder and head of crypto at Decimal Digital Current, highlights Bitcoin’s evolving role as an important institutional asset, driven by significant weekly net inflows into the new Bitcoin ETF. He predicts further price surges in 2024 due to the decline in monthly BTC supply following the halving.
Robinson saw the recent correction as an opportunity for leveraged traders to re-evaluate their positions and warned against being overconfident amid bullish sentiment. He highlights the growing sophistication and liquidity of the BTC market thanks to ETFs that are educating traditional asset managers about Bitcoin’s potential.
As the market goes through an accumulation phase and price correction, market analyst Rekt Capital advises new entrants to prepare for the volatility inherent in a cryptocurrency bull market.
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