Bitcoin, the world’s leading cryptocurrency, could experience a period of sideways trading over the next few weeks, according to an analysis by Ash Crypto on X, a prominent crypto analyst. The recent surge in Bitcoin’s price, from $32,000 to $73,000, without a significant correction, can be attributed to the introduction of Bitcoin Spot ETFs (Exchange-Traded Funds).
The market witnessed a surge in Bitcoin’s value earlier than expected due to the Fear of Missing Out (FOMO) associated with Bitcoin Spot ETFs. However, recent movements in the market indicate a potential slowdown in ETF buying activity. Notably, Ark Invest’s Bitcoin Spot ETF, which is the third-largest buyer among ETF providers after Blackrock and Fidelity, witnessed an outflow of $87 million.
If these ETF providers decrease their buying or begin selling, it could prompt Bitcoin’s price to search for the next major support level, which may lead to a temporary sideways movement in the cryptocurrency market. Furthermore, the approval process for Ethereum Spot ETFs by the Securities and Exchange Commission (SEC) could face delays, pushing the expected launch date from May.
In addition, the Federal Reserve (Fed) might postpone rate cuts during the upcoming Federal Open Market Committee (FOMC) meetings in May and June. This contradicts market expectations of a rate cut in June. These occurrences have the potential to create short-term panic among investors and contribute to a period of sideways movement in the crypto market.
However, it is important to note that such market fluctuations are not uncommon. Historically, the cryptocurrency market has exhibited periods of volatility followed by periods of stabilization. Ash Crypto advises investors to consider the correction charts from the 2017 and 2021 cycles, which demonstrate the market’s tendency to settle the volatility within one to two months before resuming an upward trend.
While the prospect of sideways trading may raise concerns among some investors, it is crucial to maintain a long-term perspective and avoid succumbing to panic. Market trends suggest that Bitcoin’s price will eventually recover from any temporary setbacks and resume its upward trajectory. It is essential for investors to stay informed about potential market factors and exercise caution when making investment decisions.
