Bitcoin price faced significant selling pressure on Monday, continuing a downward trend that began on June 7th when it reached its peak at $72,000. BTC tested the $60,000 level, resulting in a loss of over 15% of its value in recent weeks. This decline in Bitcoin’s price triggered a major crash among altcoins, with tokens like Turbo, Solana, and Cardano falling more than 20%.
Despite the prevailing pessimism and fear in the crypto industry, some analysts remain optimistic about Bitcoin’s future. One such analyst, Rekt Fencer, explained in a post that BTC will eventually bounce back later this year. He pointed out several potential catalysts that could push Bitcoin’s price higher. Firstly, he noted that Bitcoin tends to consolidate after halving, which is likely due to the concept of “buying the rumor and selling the fact.” This consolidation is occurring as investors await the next catalyst, following the approval of spot Bitcoin ETFs earlier this year when Bitcoin was trading at significantly higher levels. In the past, Bitcoin consolidated for four months in 2016 and five months in 2020 after halving.
Rekt also highlighted three key reasons for the current consolidation: the summer period being a period of stagnation, uncertainty surrounding the Ethereum ETF, and the lack of a clear narrative in the market. Additionally, negative headlines such as Germany selling $3 billion in Bitcoins and ETFs experiencing nearly $1 billion in outflows have contributed to the negative sentiment. Despite these challenges, Rekt believes that Bitcoin’s price will ultimately recover, with potential catalysts including the upcoming US election, support for digital currencies from Donald Trump, interest rate cuts by central banks, and the approval of Ether ETFs.
Rekt also expects altcoins like Ethereum, Solana, IOTA, and Hedera Hashgraph to benefit from Bitcoin’s rebound. Historically, altcoins, including meme coins like Bonk, Pepe, and Floki, tend to outperform Bitcoin during bull runs. Rekt predicts that Ethereum’s price will rise, as the SEC has indicated that it will likely approve most or all ETF applications soon. This approval could lead to increased inflows, similar to what was observed with Bitcoin a few months ago. Furthermore, the volume of Ethereum balances in exchanges is declining, indicating potential accumulation. Similarly, Solana’s price is expected to benefit from the approval of Ethereum ETFs, as it is one of the largest and most liquid altcoins. In fact, 3iQ Digital Asset Management recently filed for North America’s first Solana ETF in Toronto. If Rekt’s estimates are correct, other altcoins like IOTA, Hedera Hashgraph, and Zilliqa will also see a rebound.
However, there are risks to the bullish predictions for Bitcoin and altcoins. One key risk is the formation of a triple-top chart pattern at $72,000 for Bitcoin. This pattern is typically bearish, and a break below the neckline at $56,520 could indicate further downside for the cryptocurrency.