The price of the flagship cryptocurrency Bitcoin ($BTC) appears to have established a temporary price floor of around $56,000 after experiencing a 17.5% decline from a new all-time high above the $73,000 mark earlier this month.
Ngokombiko osanda kushicilelwa I-Bitfinex Alpha report, the cryptocurrency’s price stabilized over a slowdown in inflows to spot Bitcoin exchange-traded funds (ETFs). The price floor Bitfinex found is “just above the Realised Price for the short-term holder cohort,” which is currently at around $58,000, while also being the estimated cost basis for those who invested through spot ETFs.
The report details that a fall to $56,000 would be “the maximum downturn we would expect from a new local high” and would represent a drop of around 23% to 24%, which is “consistent” with the firm’s earlier analysis of corrections to market bottoms.
This pattern held after Bitcoin’s price reached its floor in November 2022 after dropping below $15,500. The current correction aligns with this trend, falling within the average range of 20% to 22% observed this cycle, even considering intraday flash crashes.
The Realised Price level for the short-term holder cohort has acted as a significant support and resistance point throughout the current trading cycle, further supporting Bitfinex’s BTC price floor.
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However, Bitfinex analysts caution against expecting a rapid rebound, writing:
Regardless of these levels it is important to note that BTC has already corrected 17.5 percent which is close to the average downturn from local highs since the bear market bottom. Regardless of whether we see BTC move lower, we do not expect a V-shaped recovery as has been the case for previous dips since 2023.
Bitfinex’s report comes after the price of the flagship cryptocurrency, Bitcoin, dropped to a low around the $61,000 mark after hitting a new all-time high earlier this month and amid its subsequent recovery that has seen it now reach $71,000 again.
As CryptoGlobe reported, cryptocurrency investment products saw outflows totaling $942 million over the past week. This follows seven weeks of inflows totaling more than $12 billion amid “hesitancy” among investors caused by a recent cryptocurrency market correction.
Bitcoin-focused investment products suffered $904 million of outflows, while Ethereum-focused products saw $34.2 million of outflows. Altcoins including Solana and Cardano also saw outflows of $5.6 million and $3.7 million respectively, with multi-asset products seeing $7.3 million of outflows.
Notably, investment products offering exposure to XRP saw $1.2 million in inflows, while those offering exposure to Polkadot ($DOT) saw $5 million in inflows.
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- Source: https://www.cryptoglobe.com/latest/2024/03/bitfinex-report-points-to-key-bitcoin-btc-support-level-after-recent-dip/
