Bitcoin correction amid buyers' profit taking

19 March 2024 116
Bitcoin correction amid buyers' profit taking

Bitcoin quotes, as expected, began the long-awaited correction. The highs could not be renewed endlessly, as the desire of the bulls to take at least part of the profit became stronger and stronger. The price of the main cryptocurrency has already pulled back by 13% from last week's peak, but compared to the doubling of its value over the previous month and a half, the current correction still looks modest. 63000 and 60700 levels may become the next targets of the downward movement.

 

Bloomberg analysts draw attention to the gradual cooling of investor interest in bitcoin ETFs. Grayscale Bitcoin Trust, the world's largest exchange-traded fund investing in the main cryptocurrency, recorded a sharp cash outflow on Monday. Market participants withdrew $643 million from the fund, the worst result since the ETF officially began trading in the United States on January 11. In just one day, Grayscale Bitcoin Trust lost almost 2.6% of its volume.

 

Some of that money may have gone to competing funds formed by Fidelity Investments and BlackRock Inc. Nevertheless, even taking this fact into account, Bloomberg representatives estimate the total withdrawal of liquidity from the cryptocurrency market at more than $150 million. QCP Capital analysts consider the withdrawal of money from bitcoin ETFs as a clear bearish signal for the main cryptocurrency prices. Selling may further intensify if the outflow of funds from the market continues in the coming days.

 

Traders may shift their attention from bitcoin to other assets, especially against the backdrop of central banks' continued tight monetary policy. The Fed is unlikely to provide distinctly dovish signals at tomorrow's meeting, while the Bank of Japan today finally canceled the world's last negative key rate. The cryptocurrency market may lose some of its popularity in such conditions.

 

On the daily bitcoin chart, the RSI indicator continues to move downward, providing a sell signal. Probably, the bears will consider the 63000 mark as a reference point, and further - the Fibonacci 38.2% level (60700 mark).

 


Consider the following trading strategy:


Selling BTCUSD at the current price. Take profit 1 - 63000. Take profit 2 - 60700. Stop loss - 67000.

This content is for informational purposes only and is not intended to be investing advice.

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