Bitcoin Faces Uphill Battle as BTC Price Losses Continue
Bitcoin (BTC) has been facing significant challenges in the past week, with a 15% price loss. The recovery process for the cryptocurrency may take more than a month, as analysts warn of limited liquidity in the market.
Last week, Bitcoin saw rangebound swings as one analyst expressed concerns over the lack of order book liquidity. The market experienced a 1.5% drop in just one hour, following a trip to near $43,000. The absence of active trading on Wall Street due to a holiday contributed to the erratic price behavior.
Analysts point out that the spot markets lack sufficient depth, which makes them vulnerable to sudden volatility. Popular trader Skew noted that there is currently very limited liquidity, suggesting that unexpected price movements could occur at any moment. In the absence of more robust trading, the market remains susceptible to wild swings.
Recovery Process for Bitcoin Could Take More Than a Month
Bitcoin’s recent 15% price drop has left analysts predicting a prolonged recovery period. One analyst, Matthew Hyland, suggests that Bitcoin may go sideways for a while. He drew a comparison between the current market situation and past instances of red volume, indicating that previous recoveries took three to four weeks of sideways price action. Such an environment could benefit other cryptocurrencies like Ethereum and altcoins if Bitcoin’s dominance breaks down.
Analysts Warn of Limited Liquidity in Bitcoin Market
Bitcoin’s price volatility is an indication of the limited liquidity in the spot markets. Derivatives have been leading the recent price swings, making the overall market increasingly vulnerable. The lack of significant trading volume makes it difficult for stability to be maintained on lower timeframes. Traders who rely on deep liquidity may hesitate to participate in such volatile conditions.
BTC/USD May See Weeks of Sideways Price Action
According to analyst Matthew Hyland, it may take several weeks for BTC/USD to recover from its recent losses. The chart he shared shows that in previous situations with similar red volume, Bitcoin experienced a minimum of three to four weeks of sideways price action. This period of stabilization may benefit other cryptocurrencies, as Bitcoin’s dominance might weaken.
Bitcoin Price Crash Possible Within the Next Month
Looking ahead, popular trader and analyst Rekt Capital presents a possible roadmap for Bitcoin’s price action. He suggests that if Bitcoin is going to experience a deeper retrace in the pre-halving period, it is likely to happen within the next 30 days. This timeframe aligns with historical patterns, where last-minute price gains occur approximately two months before the block subsidy halving event. Bears will have limited time to initiate any significant downward pressure.
In conclusion, Bitcoin is facing an uphill battle as it tries to recover from its recent price losses. The limited liquidity in the market and the possibility of prolonged sideways price action suggest that the recovery process may take more than a month. Traders should carefully consider these factors when making investment decisions.
Analyst comment
Negative news:
1. Bitcoin has faced a 15% price loss in the past week.
2. Analysts warn of limited liquidity in the market, making it vulnerable to sudden volatility.
3. Bitcoin’s recent price drop may result in a prolonged recovery period.
4. Bitcoin’s price volatility indicates limited liquidity in the spot markets.
5. Bitcoin’s recovery process may take more than a month.
6. Bitcoin’s dominance might weaken, benefiting other cryptocurrencies.
As an analyst, the market for Bitcoin is expected to face challenges and volatility in the near future due to limited liquidity and the possibility of prolonged sideways price action. Traders should be cautious and consider these factors when making investment decisions.
