Bitcoin had another massive decline on Friday; it started trading at $86,511 but plummeted to $80,537. It has since recovered and is edging closer to its opening price.
Friday’s dip is an extension of the downtrend that started on Nov 11. It continued Thursday’s decline, retracing from $93k to $85k and ending with losses exceeding 5%.
Since Nov 11, the coin has lost 21% amid clamour for a pullback. One analysis predicted a strong rebound after the asset closed its CME gap around $91k. However, current prices suggest that this was not the case.
Investors fear further decline following the test of $80k. As a result, some are panic-selling. One such is BlackRock, which sold 4,198 BTC a few hours ago.
This is not the first time the firm has been selling its BTC bag. A recent report showed that he sold 12,097 BTC over Monday, Tuesday, and Wednesday. Nonetheless, other investors joined the frenzy, with one Bitcoin OG, Owen Gunden, dumping 2,499 BTC on Thursday.
The latest sale by the investor marks the last tranche of his 14-year investment. Additionally, the transfer concluded a month-long selling spree that began in late October, during which he offloaded 11,000 BTC, valued at about $1.3 billion.
US Bitcoin ETFs Remain Bearish
Last week, one of the biggest headlines was about a massive selloff affecting Bitcoin exchange-traded funds.
One analysis noted that on the fourth day, ETFs recorded net outflows of $870 million, their second-largest single-day withdrawal on record. The only larger outflow occurred in February, when over $1.13 billion exited the market. Price action reacted then in almost the same way it is responding now.
The article added that the selling pressure was temporary and would end the following week, citing a similar event.
However, the prediction failed as the selloff continued into the current week. Investors continued dumping, with Sosovalue reporting an outflow of $600 million during the first two days. Nonetheless, the investment funds saw a slight pullback on Wednesday.
Another key event happened the next day, toppling the previous net outflow. On Thursday, ETFs tied to the apex coin recorded an outflow of $903 million, the second-largest since inception. Bitcoin saw massive bearish action across almost all sectors, which explains the recent retracement.
Some individuals are seeing massive opportunities amid the downtrend. One such is Peter Brandt, who stirred controversy with his latest comments on Bitcoin and Michael Saylor’s holdings. He suggested that the US government could intentionally drive prices lower to force MicroStrategy into liquidation. He suggested that the government should then accumulate at a discounted price.
Is It Possible?
When asked about the odds of a plummet to $30k, ChatGPT offered a very low chance of this happening. It stated that the “probability of Bitcoin dropping to $30,000 in the next, say, 12-18 months at very low, perhaps 5%-15%.”
Breaking down its response, it reiterated that the 15% chance is only if the government cracks down on the asset. If the current regulatory landscape remains unchanged, there’s a 5% chance this will happen.
Aside from the AI, the Bitcoin Rainbow chart shows almost no chance of this happening. The chart, which has different signals that depict various signals, has been one of the most reliable in predicting market tops and bottoms.
BTC is currently trading in the dark blue region. This is the second-to-last area that always dictates the bottom. It is also worth noting that the color is a buy signal, suggesting a high likelihood of a rebound. Slipping below this region will see the apex coin break $79k.
The next region is the purple area, the bottom. The lowest part of this area is $64k. A look at the rainbow chart shows that the apex coin has not broken below this level since its inception.
In summary, the foreseeable low for BTC could be $60k (in a worst-case scenario). A slip to $30k is almost impossible.
Bitcoin Weekly Chart Weighs In
Bitcoin broke above $30k in October 2023 and has since continued above it. This means that the asset has spent over 2 years above the mark.
Historically, since 2020, BTC has not retested its two-year low. To put this into perspective, the apex coin broke above $10k in 2020 and remained there throughout 2021. However, it plummeted to $15k in 2022 but rebounded.
Similarly, the asset broke above $30k in 2023. As it stands, this is one of its lowest values in the last two years. Bearing in mind the working principle of retesting the 2-year low, a slip to the highlighted price is less likely.
Away from prices, indicators are flashing signals that the bottom may be in soon. One such is the bollinger bands, which show that the apex coin broke below the lower band two weeks ago. According to the metric’s guiding principle, a rebound is imminent.
The relative strength index is another critical indicator that backs a claim that the asset will not retrace to such a level. A closer look at the chart shows that the latest decline began after the metric rose above 70. It plummeted, breaking below the level at which many expected a rebound.
The chart shows that RSI may plummet below 30 after missing this level. Nonetheless, this does not point to an increased chance of slipping to $30k; instead, it aligns with the rainbow chart, suggesting that a drop to $60k is likely, and this may be the low.
