Bitcoin price eyes $48,000 as European Central Bank tears down at BTC after spot ETF approval – FXStreet
Lockridge Okoth
FXStreet
Bitcoin (BTC) price is begining to lean south after a multi-day consolidation, with bearish forces coming from, among others, recent reports that the European Central Bank (ECB) does not belive in the convinience of BTC.
Also Read: Bitcoin price could drop 7%, but MicroStrategy nearly merits S&P 500 inclusion
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
In a Thursday blog titled “ETF approval for Bitcoin – the naked emperor’s new clothes”, the European Central Bank (ECB) detailed an analysis of the Bitcoin market, saying that the king of cryptocurrency “has failed on the promise to be a global decentralized digital currency,” adding that BTC “is still hardly used for legitimate transfers.”
The blog also argues that despite the landmark approval of spot BTC exchange-traded funds (ETFs) on January 10, BTC is still not suitable as a means of payment or as an investment. The ECB contravenes the general opinion among crypto proponents that ETF approvals validate BTC as a safe investment.
The Central Bank also said that the preceding rally seen in Bitcoin price following the approvals is proof of an unstoppable triumph is false, highlighting that the fair value of Bitcoin remains zero.
We disagree with both claims and reiterate that the fair value of Bitcoin is still zero…the use of ETFs as financing vehicles does not change the fair value of the underlying assets.
The ECB says that there is a worst-case scenario where Bitcoin’s expected boom fails, urging traders to brace for massive collateral damage, including the “ultimate redistribution of wealth at the expense of the less sophisticated.”
Debunking the “false promises of Bitcoin” and warning of the social dangers if not effectively addressed, the blog argued:
Further, the ECB report acknowledges that while Bitcoin price is gaining as hope grows the Fed could lower interest rates and increase the risk appetite of investors. Then again, the report says, “This could turn out to be a flash in the pan.”
Meanwhile, as Bitcoin price’s horizontal consolidation continues, the market is slowly leaning to the downside. The price is testing the immediate support at $51,335 and could break below it as multiple technical indicators flash bearish.
To start with, the Relative Strength Index (RSI) has already executed a sell signal by crossing below its signal line (yellow band). The Moving Average Convergence Divergence (MACD) is also teasing with a potential bearish crossover below its signal line (orange line).
In addition, the histogram bars of the MACD are also fading as they edge toward negative territory. The same outlook is seen with the Awesome Oscillator (AO) histogram bars, flashing red as they edge toward the mean line.
If the $51,335 support gives in, Bitcoin price could drop, first losing the $50,000 milestone as support with the possibility of extending to the $48,000 level. In a dire case, the fall could see BTC retrace the $40,000 psychological level, almost 23% below current levels.
Also Read: Bitcoin back over $51K, crypto market recovers as Nvidia’s earnings rejuvenates AI-tokens
BTC/USDT 1-day chart
On the other hand, increased buying pressure could see Bitcoin price reclaim its range high of $52,985, last tested on February 20. Clearing this blockade could set the pace for Bitcoin price to extend past the $53,000 level. A break and close above this level would make $60,000 the next target for BTC. A test of this psychological level would denote a 17% climb above current levels.
Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto market cowers with sell signals after FOMC minutes
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Join Telegram
Join Telegram
PEPE’s social dominance and relevance have been increasing since February 20. This week, top cryptocurrency exchanges have shared PEPE and related memes in tweets on their official X handle.
SEI and Omni Foundation could help NFTs across the Ethereum ecosystem transition to scaling solutions and rollups. The two have proposed a new token standard, xERC-721, with a “code minimized” upgrade to the current standard.
Bitcoin price has formed a potential top signal that forecasts a sell-off. The weekly chart also points to a bearish divergence, which adds credence to the bearish outlook. Investors can expect BTC to consolidate between the $52,062 to $45,160 levels.
XRP price inches closer to support at $0.52 after the recent developments related to the SEC’s lawsuit against Ripple. Kraken cited a key part of the SEC’s lawsuit against Ripple that could impact the outcome of its own legal battle against the regulator.
Bitcoin price has formed a potential top signal that forecasts a sell-off. The weekly chart also points to a bearish divergence, which adds credence to the bearish outlook. Investors can expect BTC to consolidate between the $52,062 to $45,160 levels.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXStreet are those of the individual authors and do not necessarily represent the opinion of FXStreet or its management. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and omissions may occur. Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, clients or contributors, is provided as general market commentary and does not constitute investment advice. FXStreet will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.