Bitcoin’s Recent Price Dip Seen as Bull Cycle Pause Not End According to Analysts

Summary

• Pullback as Shakeout: Analysts believe the current 22% Bitcoin’s price correction is a typical shakeout within a bull cycle, not the start of a bear market, pointing to historical patterns of bull market corrections.

• Institutional Investment Impact: The rapid growth of spot Bitcoin ETFs and substantial institutional inflows are significantly impacting market dynamics and potentially altering the traditional four-year cycle predictability.

• Halving Event Still Relevant: Despite a declining four-year CAGR and institutional shifts, Bitcoin halving events are still expected to be a critical long-term driver of price appreciation due to the reduced supply of new Bitcoin entering the market.

Although Bitcoin has recently retreated 22% from its peak valuation, market observers are positing that this price correction represents a temporary market adjustment within a continuing upward trend, rather than the onset of a bearish downturn.

Amidst current market fluctuations and ongoing dialogues concerning Bitcoin’s sustained relevance, the digital currency remains a central subject in both finance and technology sectors.

Despite concerns from some investors that the recent price decrease indicates the conclusion of Bitcoin’s impressive bull run, experts contend that these kinds of pullbacks are an expected component of its established four-year market rhythm.

Historical evidence indicates that price retreats within a bull market are common occurrences. These pullbacks often function as market “shakeouts,” where less committed investors sell their holdings before a subsequent price advance.

“Several vital technical indicators have turned to bearish signals, prompting speculation about a premature end to the bull market phase,” Bitfinex analysts recently commented.

Despite these bearish indicators, they stressed that Bitcoin’s established four-year cycle continues to be a dominant factor influencing price oscillations.

“Price corrections during bull markets are typical, and historical patterns suggest that this recent downturn is more likely a shakeout, rather than the commencement of a protracted bear market,” these analysts elaborated.

A distinctive element of the current cycle is the growing influence of institutional investment and the swift uptake of US-based spot Bitcoin exchange-traded funds (ETFs).

Bitcoin’s Long-Term Cycles and Future Influencers

Since their initial approval, these spot Bitcoin ETFs have accumulated over $125 billion in total assets under management, highlighting substantial institutional demand for Bitcoin from established financial sectors.

BTC achieved a daily closing price exceeding $84,000 on March 15th, marking its highest daily close since March 8th. This observation suggests that, notwithstanding short-term market volatility, buying interest persists at significant price thresholds.

Despite Bitcoin’s independent market cycles, analysts advise that its correlation with conventional financial markets remains a significant consideration.

Bitcoin’s price fluctuations frequently mirror trends observed in equity markets, notably the S&P 500. This interconnectedness means that wider economic conditions, including government bond yields and macroeconomic policy, could significantly influence Bitcoin’s upcoming major price movement.

According to Bitfinex analysts, a definitive price floor for Bitcoin may only materialize upon stabilization within the broader equity market landscape.

This decrease has initiated debates about the ongoing relevance of Bitcoin’s established price cycles. However, Kalchev stressed that the halving events retain their vital importance.

“While robust institutional adoption over the past year has provided a considerable boost to Bitcoin’s performance, its halving events are still expected to exert a lasting influence,” Kalchev stated in a recent discussion.

Also Read: VanEck Crypto anticipates that Bitcoin will reach $180,000 during the current bull run

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