Plunge

Bitcoin ETF

Bitcoin

<h2 id="key-points">Key Points</h2>
<ul>
 <li>Bitcoin’s price dropped 5.42% in 24 hours to a multi-week low of $57,151 on May 1.</li>
 <li>Decreased Bitcoin demand growth and increased short positions are likely contributing factors to the price drop.</li>
</ul>
Bitcoin’s price experienced a significant decrease of 5.42% within a 24-hour period, falling to a multi-week low of $57,151 on the first day of May.
On-chain data indicates that a decline in the growth of Bitcoin demand, coupled with an increase in open short positions, could be the primary reasons for this drawdown.
<h2 id="declining-demand-for-bitcoin">Declining Demand for Bitcoin</h2>
CryptoQuant, a data analytics company, suggests that the recent decline in Bitcoin’s value can be attributed to a slowdown in demand.
This is characterized by a decrease in Bitcoin balances among long-term holders, a reduction in spot Bitcoin ETF demand, and a rise in short positions in the futures market.
Data from CryptoQuant indicates that demand from long-term holders – investors who purchase Bitcoin and never sell – fell by 50% in April.
This decline in demand was also reflected in the reduced purchases from spot ETFs in the U.S., adding to the sell-side pressure.
<h2 id="traders-opening-short-positions">Traders Opening Short Positions</h2>
The slowdown in Bitcoin demand was also evident in traders’ reluctance to pay more to open long positions, as sell orders began to outpace buy orders.
Bitcoin’s funding rate has dropped to its lowest point this year, indicating a decreased willingness among traders to open long positions.
The recent price decline can be attributed to traders opening short positions in anticipation of further price drops.
Analysts are in agreement that the Bitcoin price is likely to continue its downward trend.
The current market correction has led to speculation about how low Bitcoin’s price can go before a trend reversal occurs.
CryptoQuant analysts suggest a lower target within the $55,000 to $57,000 demand zone, which is 10% below the current cost basis of traders at $63,000.
Analyst Scott Melker believes that $52,000 is the lowest the Bitcoin price could go in the short term.
He suggests that the current correction is mild for a bull market, as the daily RSI is not yet oversold.
Tuur Demeester, another Bitcoin analyst, identified Bitcoin trading at $60,409 and suggested that $50,000 could be the next stop for Bitcoin now that the $60,000 support has been lost.
Trader and analyst Mags suggested that if Bitcoin closes below $60,000 on the weekly timeframe, traders should brace for a deeper retracement, potentially to $40,000 or lower.

Bitcoin Plunge Predicts $50K: Traders Adapt as BTC Drops Past Crucial Support

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