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Bitcoin Collapses to Two-Month Lows: Is a Major Correction Looming?

 

June 24, 2024 (Investorideas.com Newswire) The cryptocurrency market has experienced a shake-up in recent weeks, with Bitcoin (BTC) being one of the main focuses of attention. On Monday, June 24, the leading cryptocurrency recorded its worst day since late April, dropping more than 5% and putting the key psychological support level of $60,000 per token at risk.

This decline comes after two weeks of bearish pressures that have led Bitcoin to lose almost 10% of its value. The lack of interest and the "hangover" sentiment following the initial boost from the creation of Bitcoin ETFs appear to be some of the main factors behind this dynamic. ETF flows have been net negative over the past two weeks, indicating a decrease in investor appetite.

Additionally, the recent strength of the US dollar, in a context where there is still relative uncertainty about interest rate cuts in the US, also seems to be negatively affecting Bitcoin and the cryptocurrency market in general.

Technical Analysis: A Double Top in Formation?

Bitcoin Weekly


From a technical perspective, Bitcoin's situation has become more concerning. The cryptocurrency previously encountered a second impasse around $70,000 during the months of May and June, which could be categorized as a double top.

While $60,000 could be considered an important support level, which somewhat delineates the neckline of the previous formation, the most significant point I personally assign is the 78.60% Fibonacci retracement of the decline from the 2021 highs, around $57,500. A loss of this level could confirm the activation of the double top and trigger a broader correction, with a possible drop to $48,000, the next significant support level.

Bitcoin Halving


Previously, we speculated about the potential of the Bitcoin halving, which took place this year, as a catalyst for a new bullish momentum. However, if $57,500 is lost, this outlook will need to be put on hold, and new fundamental factors will be necessary to restore a positive profile for the cryptocurrency.

Bitcoin's trading activity is currently uncertain, and the recent decline raises questions about the sustainability of its broader uptrend.

Quasar Elizundia, Research Strategist at Pepperstone

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