Bitcoin's price is declining, and crypto investor sentiment is extremely low.
Bitcoin Experts are predicting a possible bottom between $40,000 and $45,000.
According to Peter Brandt, Bitcoin's current price action resembles its behaviour after the 2016 halving.
Other analysts argue in favour of a "prolonged sideways market" before we see a recovery.
The crypto market is recovering. However, the state of fear remains strong, according to the fear and greed index, which fell to 17 out of 100 on Monday, 5 August.
As it stands, this is the lowest level of sentiment that investors have had towards the crypto market since 12 July 2022, after Bitcoin lost its standing above $30,000 and crashed straight down to $16,000 in a mere 40 days.
So, how much further down can Bitcoin go now that the bears have successfully dragged it below the $60,000 zone once again?
Let’s see.
On Monday 5 August, the spot Bitcoin ETFs posted massive outflows, with a total of around $168.4 million withdrawn from the market according to Farside Investors.
The Bitcoin ETF flows
Grayscale’s GBTC was the hardest hit, with outflows of around $69.1 million and $69 million, respectively.
However, others like the Grayscale Bitcoin Mini Trust, VanEck’s HODL, and Bitwise’s BITB saw inflows of $21.8 million, $3 million and $2.9 million respectively.
On the other hand, the Ethereum ETF market remained green, with iShares leading with inflows of $47.1 million.
All these inflows into the ETF market indicate that investors remained confident despite the downturn.
Market analysts have been in a heated debate so far about how low Bitcoin can crash.
For example, Tuur Demeester mentioned in a recent tweet that we might see a Bitcoin bottom around the $40,000 —$45,000 zone.
However, the analyst cautioned against making bearish bets like these in a bull market because prices can "whipsaw back up in no time."
Another analyst, Bob Loukas, mentioned that the ongoing correction might last until mid-September and may even be followed by a rally that would look like a deeper cycle pullback.
Another, McKenna urged investors not to expect a sharp recovery in the short term.
“This isn't a V-bottom scenario," she says. "[I] believe [Bitcoin’s] value will remain cheap for some time and enter an accumulation market phase.”
“As for the rest of the market, we will be sideways for 1-2 months," she concluded.
According to investor and trader Peter Brandt, however, the ongoing Bitcoin market decline and the 2016 halving share some similarities.
Brandt pointed out that Bitcoin's decline since the April 2024 halving is similar to the corrections seen in the 2015-2017 cycle when Bitcoin's price dropped by around 27% before eventually soaring to $20,000 in December of the following year.
Brandt argues that the recent slump below $50,000 represents a 26% decline from the post-halving price of $64,962.
This means that both patterns are now similar, even despite analysts warning that prices could drop lower.
Overall, the key takeaway from all of the above is that Bitcoin’s behaviour around $50,000 is worth monitoring, especially amid so many conflicting analyst opinions.
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