The past few days have been terrible for the crypto space with the dips extracting liquidity of over $280 billion from the market. The sharp dips in Bitcoin price have put major Altcoins further down below 40% in the days.
The analysis of the past few days has revealed that there has been much volatility in Bitcoin price due to several factors such as anticipation around halving, the potential impact of spot ETFs, and the rate hikes by the US government. The close-ratio of both positive and negative sentiments kept Bitcoin floating above $60,000 throughout March and April.
However, the market stance has turned negative since the halving week. In the past few days, Bitcoin price has fallen from the high of $67,200 to $56,500 – recording a drop of 15% in the meantime. While the drop seems natural in accordance with high volatility, it has been considered an upset amid the ongoing bullrun.
Why Bitcoin Is Going Down After Halving
One of the reasons behind Bitcoin price going down currently is the lack of any major news. We have seen Bitcoin price pumping from $40,000 to $70,000 due to ‘on the spot ETF approval’ anticipation. Other similar trends have also happened to push Bitcoin up or at least help it sustain at a certain level. The recently hyped launch of spot ETH and BTC ETFs in Hong Kong have also turned inconsequential as it generated only $11 million in first day trading volume – way less than expectation of $120 million.
Now, as there are no such upcoming events, the Bitcoin seems to lose its grip and failed to sustain higher price levels. Another reason is the breaking of all-time high before the halving, which was different from all past three halvings where Bitcoin broke previous highs in the post-halving phase.
Following the dip, Bitcoin’s dominance is also decreasing since the past few days when it reclaimed three years high in early April. It fell from 57% to 54% in the meantime and following the Altcoin season, this ratio is expected to shrink below 50% in the coming month.
This surprising move was unexpected and market players are now speculating for the sideway movements that occur after breaking all-time high.
Also Read: Economist Predicts Bitcoin to Hit $115,000 in Months
Could Ethereum Outperform Bitcoin in Coming Months?
One of the common predictions among crypto analysts is that Ethereum holds greater potential when it comes to parabolic surge. While Bitcoin now already has broken its all-time high for this cycle, Ethereum seems to be shorting required traction to achieve a new high.
The all-time high of ETH price is $4891 and it reached near $4066 earlier in March, according to market data from Coinmarketcap. Given that the ETH price usually records all-time high within the days after BTC’s, this time it has failed to reach even near to previous high.
In the recent market turmoil, ETH has been pulled down below $3000 after losing the strong support. However, the upcoming surge in ETH price is expected to surpass that of BTC in the upcoming months. This claim is supported by several factors such as the ETHBTC bottom, potential approval of ETH ETF and the anticipation around Altcoin season. Let’s discuss each of these in brief;
ETHBTC Recovery
The ETHBTC pair has currently shrunk to 3 years low at 0.048 while having lack of any strong support near 0.04, as seen in the chart. According to some analysts, this is the lowest ETH BTC could go and it’s now back to the levels seen at the very beginning of spot Bitcoin ETF inflows. The probable reversal in ETH BTC could lead the pair back to 0.08 before Bitcoin price reclaims $70,000 price mark.
If ETH manages to climb higher following its spot ETF approval, the gain in ETH price would unlock a new dimension. It could potentially break to new highs while leaving the BTC behind by a heavy ratio.
Potential Approval of ETH ETFs
The excitement around spot ETH ETF is still hanging in the air. Previously, the SEC was to announce its decision on ETH ETF but it is now delayed until 24 May. While most of the market players are expecting the denial, the odd outcome would be ground shaking and could send ETH price back to $4000 or beyond. Although the first ETH ETH has already been approved by Hong Kong before the USA and it received a colder response than expected.
If approved, ETH ETH could bring massive inflows to the market as Ethereum holds greater potential for growth. It is technically more advanced than Bitcoin while having market dominance of barely 17%.
Deflationary ETH Supply
The much talked Merge upgrade has turned ETH into a deflationary from an inflationary asset. Since the upgrade, there are over 432k ETH has been burned – according to data from Ultra Sound Money. This mechanism has enabled to achieve a positive burn to issuance ratio that eventually helps decrease ETH market supply overtime. With this decreasing supply and increase in demand, the ETH market is going to benefit in the long-term.
The upcoming months are going to be significant in deciding the fate for Bitcoin and kickstarting the post-halving phase of price accumulation. Some major analysts predict that while Bitcoin slows down its price action, Ethreum and other major Altcoins will reach record highs in the upcoming market recovery phase.
