Heading into the first half of 2024, the future of Bitcoin is a topic of concern for crypto investors as its value continues to decline after reaching an all-time high in March.
Fear and Greed Index records sharp decline
The Fear and Greed Index, a measure of market sentiment, experienced a significant decrease last week, dropping to 30 points, the lowest level since September 2023.
This decline in the index coincided with a general downward trend in the crypto market, triggered by Bitcoin’s drop from $62,500 to $59,100 following the news of payments to Mt. Gox clients.
Blockchain analyst Willy Wu identified a “cascading long squeeze” in BTC, attributing the asset’s decline to miners selling off their Bitcoin after the April Bitcoin halving. Wu believes that the next significant level for BTC is $54,000, and if it falls below this level, the market may enter a bearish phase.
What will happen to the Bitcoin ETF?
Investors have been pouring funds into Bitcoin ETFs, with approximately $2.6 billion invested in the second quarter, compared to about $13 billion in the first three months of the year. After a period of outflows, spot Bitcoin ETFs have recently shown positive dynamics.
However, the focus has shifted to the Ethereum ETF, as Citi predicts that its launch will attract inflows of $3.8 billion to $4.5 billion, potentially increasing the price of ETH by 23-28%. This means that ETH could reach $4,417 by November.
Will the situation improve?
CryptoQuant analysts expect positive movements in the cryptocurrency market in the third quarter of 2024, anticipating a continuation of the upward rally once miners finish selling off their BTC.
Former Goldman Sachs CEO Raoul Pal also predicts significant cryptocurrency growth in the fourth quarter of 2024, noting that assets like BTC tend to rally during U.S. presidential elections.
Overall, experts maintain a bullish forecast for Bitcoin in the medium term, despite the recent slowdown in growth as part of a local downward correction.