The largest cryptocurrency, Bitcoin (BTC), is facing downward pressure, currently trading at $64,256 with a market cap of $1.265 trillion, as the US GDP data shows economic slowdown.
Bitcoin in the Danger Zone
Experienced cryptocurrency analyst Rekt Capital has expressed concerns about a potential “Danger Zone” following Bitcoin‘s last block reward halving. Drawing on historical trends dating back to 2016, Rekt Capital noted a significant 11% downward movement about 21 days post-halving, which was then followed by an upward trend.
Attention is now focused on a potential downward movement around the “Reaccumulation Range Bottom” six days after Bitcoin’s block reward halving. The analyst warned that this downward movement, commonly referred to as the “Danger Zone,” could occur within the next 15 days. Additionally, historical analyses indicate a potential drop to around $60,600 during this period.
Potential Triggers for the Decline
Bitcoin continues to face challenges in the cryptocurrency and altcoin markets, struggling to convert the $65,600 level from resistance to support. Bitcoin has shown a consistent downward movement towards the $60,600 liquidity pool over several weeks.
The decline in Bitcoin’s price was triggered by disappointing quarterly earnings from tech giant Meta, followed by declines in shares of leading tech companies like Microsoft and Alphabet, heightening market concerns.
Traditionally, Bitcoin’s price has correlated with US tech stocks, both seen as high-risk, high-reward investments. However, this correlation has somewhat diminished, especially following the launch of spot exchange-traded funds (ETFs) in the US, allowing Bitcoin to outperform US tech stocks.
Amid current macroeconomic uncertainties, there has been a slowdown in inflows to spot Bitcoin ETFs and overall market trends. GDP data released on April 25, which fell below expectations, has increased market uncertainties, raising questions about the Federal Reserve’s future policy decisions and the likelihood of interest rate cuts throughout the year.
