If the 4-year cycles are still alive, BTC faces a pullback to $70K

Market Overview

The crypto market continues its impressive decline, losing another 2.4% over the past 24 hours. Having fallen to a low of $3.3 trillion, the market is now at its lowest point since early July. A steady move below the 200-day moving average and a drop of more than 20% from its peak are sure signs of a bear market. Perhaps crypto enthusiasts are confident that this is a temporary decline, similar to the one seen in March and April. However, we would prefer not to rule out the possibility of another bear market starting in the coming years. At a time when many have buried the 4-year cycles, we still see that they have only lost amplitude but have generally retained their influence. According to these patterns, the market is close to or has already passed its peak for the next couple of years, which explains the intense selling pressure since October.

Bitcoin fell to five-digit price levels overnight, touching lows just below $99,000 twice. BTC traded steadily below these levels from February to May. And then there was a psychologically significant consolidation period in December and January. The market is now undergoing a critical test. Another step down will open the way to the $60,000-$70,000 range. However, there is a theoretical chance that BTC will quickly rebound by the end of the week from the 50-week moving average, which has served as a global support since the first half of 2023.

News Background

Early investors continue to sell off cryptocurrency. Over the past 30 days, long-term holders have sold 400,000 BTC — about 2% of the total supply of the asset, according to WeRate. Additional pressure is coming from continued outflows from spot Bitcoin ETFs.

The US government shutdown, now in its second month, is also putting pressure on Bitcoin. Another factor is the Coinbase premium, which remains in negative territory, according to CryptoQuant. This indicates sustained pressure from US sellers.

At the same time, there has been a record outflow of stablecoins from exchanges, indicating a shift of capital from risky assets to safe-haven dollar instruments.

Demand for Bitcoin from institutional investors has declined, according to Capriole. For the first time in seven months, net purchases have fallen below the daily issuance of the asset.

Bitcoin has lost significant growth potential due to the influence of large financial institutions and government structures, according to Peter Thiel, the former PayPal CEO and billionaire.

Strategy intends to conduct its initial public offering on the European stock market, issuing 3.5 million preferred shares denominated in euros. The funds will be used to purchase bitcoins and replenish working capital.

The FxPro Analyst Team