Key Points
- Bitcoin’s price fell to a multi-month low of $49,105 on Aug. 5 due to a continued crypto sell-off.
- 76% of poll participants on Kalshi prediction platform expect Bitcoin’s price to end the year below $50,000.
Bitcoin’s price took a significant hit on Aug. 5, dropping to a multi-month low of $49,105. This is part of an ongoing crypto sell-off.
On the same day, Bitcoin (BTC) was over 33% down from its highest point this year. Despite a brief recovery above $50,000 and testing the $55,000 mark, it remains in a bear market.
Market Predictions and Industry Challenges
The prediction market shows a divide on what to expect for the rest of the year. Kalshi, a prediction platform supported by Charles Schwab, Sequoia, and Henry Kravis, reveals that 76% of its poll participants predict Bitcoin’s price will close the year under $50,000.
Furthermore, 54% of participants foresee the coin falling below $40,000, while 20% predict a drop below $30,000. On the other hand, Polymarket indicates a decrease in traders expecting Bitcoin to rise to $100,000 this year. In March, 64% of participants anticipated this rise. However, by Monday, this figure had dropped to 22%.
The cryptocurrency industry is facing significant challenges. Recent data shows that spot Bitcoin ETFs lost over $65.4 million in assets. Bitcoin’s futures open interest also dropped to over $6.2 billion from last month’s high of over $8.8 billion. Bitcoin experienced $444 million in liquidations on Monday, contributing to the industry’s total of over $1.14 billion.
Positive Signs and Technical Analysis
Despite these challenges, large investment firms such as Blackrock, Fidelity, and MicroStrategy are holding onto their coins. MicroStrategy is even raising capital to purchase more coins. In addition, the Federal Reserve might begin reducing interest rates before its September meeting, as was seen in March 2020. Inflation continues to fall while the unemployment rate has risen to 4.3%.
Bitcoin’s price technicals are providing mixed signals. The daily chart shows that Bitcoin reached a peak of $73,955 before falling to $49,104 on Aug. 5. This low point is significant as it matches the highest point on January 11. Bitcoin also fell below the 200-day moving average, indicating that bears are dominating.
Bitcoin has been forming a series of lower highs and lower lows, often an indication of further downward movement. However, it has also formed a falling broadening wedge pattern, a common bullish sign. If Bitcoin rises above the 200-day moving average and the upper side of the descending trendline, this would confirm more upside. Conversely, a drop below Monday’s low would invalidate the wedge pattern and suggest more downside as sellers target the 50% retracement level at $44,840.
