Major cryptocurrencies traded mixed on Monday evening as the bullish momentum that drove Bitcoin to achieve an all-time high of $73,835 on March 14 appears to be diminishing.
What Happened: The decline in Bitcoin’s price comes with the belief of some investors that the BTC market has become overheated following the approval of spot ETFs.
Analysts say that the pre-halving drawdown is happening at the same time as the upcomingFederal Open Market Committee (FOMC), which is set to conclude on March 20.
Spot Bitcoin ETFs experienced a surge in inflows last week, reaching a record high. However, according to 10X Research, a crypto analytics firm, a decrease in demand in the coming days may lead to a downturn in bitcoin’s price.
During the five-day period ending on March 15, the 10 ETFs collectively attracted $2.6 billion in new funds, as reported by Farside Investors. The majority of these inflows occurred from Monday to Wednesday, driving BTC to reach new all-time highs of nearly $74,000.
Subsequently, the net inflows for Bitcoin ETFs on Thursday and Friday were only $133 million and $198 million, respectively. This coincided with a sharp decline in BTC’s value to below $65,000 over the weekend.
Top Gainer (24 Hour)
The global cryptocurrency market cap now stands at $2.60 trillion, showing a 3.59% increase in the past 24 hours.
The stock market saw anincrease on Monday as Wall Street turned to anticipated new monetary policy guidance from the Federal Reserve.
The Dow Jones Industrial Average rose by 75.66 points, or 0.2%, ending the day at 38,790.43. Similarly, the S&P 500 experienced a gain of 32.33 points, or 0.63%, concluding at 5,149.42, while the Nasdaq Composite also showcased positive movement.
Investors are eagerly anticipating the Federal Reserve's policy meeting this week. The two-day Federal Open Market Committee meeting commences on Tuesday and concludes with an announcement on Wednesday.
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Analyst Notes: Cryptocurrency analyst Michael Van de Poppe suggests caution when considering the purchase of Altcoins during rallies.
"You want to purchase them when they’re down between 25-60%. That’s when the real gain comes in."
Cryptocurrency trader and independent analyst, Rekt Capital, suggested that the current price movement for BTC is a result of a pre-halving retracement. This retracement pattern has previously led to a 38% and 20% decline in Bitcoin’s value during the 2016 and 2020 halving cycles, respectively.
Pseudonymous analyst, TechDev, said that he is closely monitoring Bitcoin’s relative strength index (RSI) and its Fibonacci extension levels on the monthly time frame. The RSI, which is a widely utilized technical indicator, tracks the momentum of an asset.
TechDev suggested that historically, whenever Bitcoin’s RSI surpassed the mid-point of a descending channel (currently near the 65 level), Bitcoin experienced a surge toward the 1.618 Fibonacci extension level.
Given that Bitcoin is currently above TechDev’s channel median point, the pattern indicates a potential rally towards its 1.618 level, estimated to be at $160,000.
"No guarantees here, but I do find it interesting…Each time monthly RSI broke above the channel median, it went to the channel top, and Bitcoin went to the 1.618."
Photo by Fernando Cortes on Shutterstock
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