Under the dovish tone set by the Federal Reserve this week, Bitcoin briefly rebounded above $68,000. However, with market sentiment fluctuating, most of the gains have been erased. Is now a good time to buy the dip?
(Previous Summary:
M6 Research Report: How Does Bitcoin Halving Affect the Market? What Opportunities Are There in the Bitcoin Ecosystem?
)
(Background Supplement:
Bitcoin ETF Sees Four Consecutive Days of Net Outflows: BTC Falls Below $65,000, Ethereum Loses $3,500 Support)
Table of Contents
Profit-taking is more likely to continue
Bernstein raises Bitcoin year-end price target to $90,000
Opportunity to buy on dips
In the past 24 hours, the cryptocurrency market has seen more declines than gains. Bitcoin has given back the gains it made on Wednesday, driven by the dovish tone of the Federal Reserve, and its trading price is now hovering below $65,000.
Some altcoins have outperformed Bitcoin. Ripple’s XRP, decentralized data storage platform Filecoin’s FIL, and Internet Computer’s ICP tokens have all risen 6%-7% in the past 24 hours. Meanwhile, Solana (SOL), Avalanche (AVAX), and Aptos (APT) have declined 2%-5% during the same period.
Profit-taking is more likely to continue
Morgan Stanley analyst Nikolaos Panigirtzoglou wrote in a report that Morgan Stanley’s futures positions proxy and the Bitcoin futures premium relative to spot indicate that Bitcoin is still overbought.
The analyst stated that these indicators suggest that positions have only slightly unwound so far. They stated:
Last week, Morgan Stanley analysts predicted that the price of Bitcoin could drop to around $42,000 after the halving, citing reduced miner rewards and rising production costs.
So far, the significant outflows recorded by Grayscale’s GBTC seem to be intensifying bearish sentiment. GBTC’s Bitcoin holdings have decreased by over 40% since converting to a spot Bitcoin ETF on January 11. As of this week, the net outflows from major ETF issuers have approached $749 million.
However, Bloomberg’s Chief ETF Analyst Eric Balchunas denied the impact of Grayscale outflows on Bitcoin’s price trend, stating that there is no direct correlation between ETF flows and BTC price performance.
Further reading:
Morgan Stanley: Bitcoin Could Drop to $42,000 After Halving, Current BTC Still Overbought, Downtrend Not Over
Bernstein raises Bitcoin year-end price target to $90,000
According to a research report by Bernstein, the company has raised its expected target price for Bitcoin from $80,000 to $90,000 by the end of this year. Based on the rise of Bitcoin and the positive response to the new spot Bitcoin ETF, the company has also raised its outlook for cryptocurrency mining stocks.
Bernstein raised CleanSpark’s target stock price from $14.20 to $30 and maintained an outperform rating; lowered Riot Platforms’ target stock price from $22.50 to $22 and gave the stock a market outperform rating; and raised Marathon Digital’s (MARA) target price from $14.30 to $23.
Bernstein analysts Gautam Chhugani and Mahika stated:
Opportunity to buy on dips
Bernstein analysts stated in their report this week that Bitcoin recently retreated from its all-time high of over $73,000 to below $63,000, representing a temporary “opportunity to buy on dips” before the halving. They stated:
Some analysts believe that Bitcoin may reset the “sustainability of the bull market” through a deeper decline. Anonymous cryptocurrency trader Jelle analyzed on the X platform that unless BTC holds the level of $65,300, the correction will not end, and the price may continue to consolidate within the current range for a period of time and need to reclaim the price level of $69,000 (the peak of the 2021 market cycle) to reignite the upward momentum to higher prices.
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