Bitcoin at $26K: Crypto Traders Tilt Bearish; DOGE and XRP Lead Major Dips
Currently, Bitcoin is undergoing a consolidation phase, and an analysis based on past cycles suggests that there may be potential gains after the halving event projected for 2024, according to insights from a data firm.
In the short run, those observing Bitcoin tend to have a pessimistic outlook. However, there's optimism for a surge in prices post the much-anticipated halving event slated for 2024. Until then, a period of consolidation is in the forecast.
The oldest asset in the industry had a rather subdued weekend characterized by price stability and subdued trading volumes, with its value hovering around $26,000. It recorded a 1.7% decline in the past 24 hours.
Prominent tokens like XRP and Dogecoin (DOGE) led the decline, both experiencing drops of 4% within the same 24-hour period. Ether (ETH) saw a 0.9% decline, showing relatively better performance compared to the broader market. The Bitsday Market Index (BMI), which tracks a multitude of tokens, witnessed a 1.1% slump.
Tokens like Aptos's APT, Chainlink’s LINK, and ImmutableX’s IMX stood out as exceptions, gaining as much as 6%. These increases were attributed to various growth factors, though some of them later proved to be misleading.
According to analysts from trading firm FxPro, who shared their insights with Bitsday, they maintain a bearish outlook for the next few weeks, with expectations of prices potentially dropping as low as $23,000. This sentiment arises from a general lack of interest in trading riskier assets and the absence of significant market-driving catalysts.
Despite this bearish sentiment, there remains optimism among bulls. On-chain data platform CryptoQuant published a weekly note suggesting that Bitcoin's recent price performance closely mirrors patterns from previous cycles. This implies that the asset is likely to remain in a consolidation phase until the 2024 halving event, after which a significant price increase could be anticipated.
The analysts at CryptoQuant supported this assessment by referring to various long-term valuation metrics, including logarithmic growth curves. They also pointed to the realized cap of short-term user transactions (UTXOs), which suggests undervaluation and a lack of widespread retail speculation, both reinforcing the potential for future price growth.
Historically, Bitcoin prices have seen an upswing following its halving events, which occur approximately once every four years, resulting in a reduction in block rewards. According to available data, the estimated date for the next halving is April 21.
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