According to a cryptocurrency analyst, Bitcoin’s price is unlikely to retrace down to $50,000 anytime soon because to the frequency with which it reaches higher support price levels and the “lack of immediate froth” in the derivatives markets.
In an April 7 research note, Dylan LeClair, a senior analyst at digital asset firm UTXO Management, noted that short positions would be severely impacted if Bitcoin returned to the $70,000–$75,000 price range. “As we’ve consolidated, between seventy and seventy-fivek short liquidations are building,” he said. In the event that Bitcoin reaches a price of $70,000, about $174.17 million will be distributed.
Approximately $830 million worth of short bets would be liquidated if it rose to the upper limit of LeClair’s range ($75,000). This corresponds to a rise of approximately 7.8% above the current price of $69,344 for Bitcoin. Similarly, on March 15, there was a 7.5% change in percentage that went downhill and resulted in $525.2 million in liquidations.
LeClair clarified that while a drop in Bitcoin’s price below $50,000, or 27% less than it is now at writing, may cause significant long position liquidation, he doesn’t anticipate it happening given the recent price changes and rising support levels.
He said, “I find it pretty unlikely we revisit that level, given the structure of higher lows and the lack of immediate froth in the derivatives landscape currently, even though there is a large cluster of longs that could be taken out at ~50k.”
“Obviously not impossible,” he cautioned. The price of bitcoin recently fell below $50,000 on February 13 and reached $49,725. It hit $50,000 just a day earlier, on February 12, a level not attained since December 2021. The recent action by global asset management BlackRock, which amended its Bitcoin exchange-traded fund (ETF) prospectus on April 5 and added five significant Wall Street businesses as new approved participants, was used by him to bolster his allegations.
ABN AMRO Clearing, Citadel Securities, Citigroup Global Markets, and Goldman Sachs and UBS securities are among the new members.
Leading cryptocurrency traders are making predictions about the price of Bitcoin in advance of the April 20 halving event. Every four years, there will be an event that reduces miner block rewards from 6.25 BTC to 3.125 BTC, a 50% decrease.
According to a recent analysis, the price of Bitcoin has increased by around 658% since its last halving in 2020. Should past chart patterns recur, Bitcoin’s price, assuming it follows the present cycle, should hit $434,280 per coin by the 2028 halving.
The cryptocurrency dealer Rekt Capital thinks there’s a good chance things will continue to rise in the near future. In a post dated April 7, he informed his 443,000 followers that the market is about one-third of the way through the “bull market” phase.