Cryptocurrency markets may be nearing the bottom of the current downturn, but Compass Point analysts say a broader risk-off event will be needed to push Bitcoin higher. $BTC$79,061.70 significantly lower.
“While near-term risks remain biased to the downside, we believe the crypto bear market is nearing its end,” analysts Ed Engel and Michael Donovan said in a report on Monday. “Further declines will likely require a bear market in U.S. stocks.”
Their base case calls for Bitcoin to bottom between $60,000 and $68,000, a zone that has shown long-term holders buying with conviction in past cycles. “We see very strong support within this range and our base scenario is as follows. $BTC The bottom price is around $65,000,” they wrote. $BTC Owned by long-term holders (6+ months), 7% were acquired for $60,000 to $68,000. ”
Bitcoin recently fell below $81,000 over the weekend to $74,532, a level that analysts say reflects the average cost base of both Bitcoin exchange-traded fund (ETF) investors and the broader market. “Since January 15th, Bitcoin ETFs have recorded net outflows of $3 billion. With more than 50% of the ETF's assets under management currently underwater, we see outflows continuing to increase while there is a risk of overhead resistance around $81,000 to $83,000,” they wrote.
“Air Pocket”
Engel and Donovan say there is currently an “air pocket” in the $70,000 to $80,000 price range, with little structural support above $70,000.
“Less than 1% of the long-term supply has been acquired within this range,” he said, warning of the possibility of further selling pressure.
If Bitcoin breaks out of the $60,000 to $68,000 support range, the next stop could be around $55,000, but only in more extreme situations. “Past bear markets bottomed out below the average cost basis of all historical buyers,” they said. This level is currently around $55,000, but “during the 2022 bear market, it took a combination of an equity bear market and some high-profile crypto bankruptcies to break through this level.” $BTCaverage cost basis. ”
