Bitcoin Retreats with New Target Price Decrease of 17%. Forget About $1 Million…

Bitcoin Retreating with a Target Price Down 17% to $50,000

Bitcoin is currently experiencing a retreat with a target price down 17% to $50,000, far from the $1 million mark predicted just a few weeks ago.
After a period of intense speculation and exponential growth, the world’s first cryptocurrency is now in a phase of significant correction.
In recent months, Bitcoin has dominated the financial markets, fueled by enthusiasm for Bitcoin ETFs and optimistic forecasts from industry analysts.
However, after a rapid price surge – which saw Bitcoin grow by 300% since the end of 2022 – the landscape has suddenly changed.

Is this a temporary correction or the beginning of a new crypto-winter?

In this article, we will analyze the reasons behind Bitcoin’s sharp decline and examine the implications of this correction for investors, offering a perspective on how the cryptocurrency landscape may evolve.

3 Reasons Why Bitcoin Is Falling

The recent drop in Bitcoin can be attributed to three main factors that have exerted strong pressure on the market:

1. Bitcoin Confiscation Sales by the German Police: The German police have sold approximately $325 million in confiscated Bitcoin, raising concerns about available reserves and amplifying bearish sentiment among investors.
   This move increased the supply of Bitcoin in the market, contributing to the price decline.

Data from Glassnode indicates that the recent Bitcoin sell-off was mainly driven by short-term holders (STH), those who have held Bitcoin for less than 155 days.
These investors accounted for nearly all realized losses, totaling $537 million.
In contrast, long-term holders (LTH), who have owned Bitcoin for over 155 days, suffered much smaller losses, only $543,000.

Furthermore, the data shows that approximately $325 million of the losses can be attributed to “whales,” entities holding between 100 and 10,000 BTC.
This highlights that even large-scale investors are vulnerable to market pressure and may sell similar to retail investors.

2. Regulatory Investigations in the United States: The Commodity Futures Trading Commission’s (CFTC) investigation into Jump Trading, a major market maker in cryptocurrency trading previously involved in scandals like FTX and TerraUSD, added further pressure to the market.
   Regulatory concerns increase uncertainty and lead investors to reconsider their positions in Bitcoin, fueling greater risk aversion.
3. Interest Rate and Inflation Expectations: The general risk aversion atmosphere has also been fueled by expectations of inflation in the United States.
   PCE price index data, which directly influences Federal Reserve policies, have led many investors to withdraw from cryptocurrencies in favor of more traditional assets like the US dollar.
   This change in attitude is highlighted by CoinShares’ data, showing outflows totaling $630 million from Bitcoin exchange-traded products.
   This reversal from previous inflows indicates growing caution among investors regarding cryptocurrency market volatility.