Ahead of the much-awaited Bitcoin (BTC) halving, experts are warning of impending price declines. Leading cryptocurrency analytics firm CryptoQuant has issued a warning, stating that if certain critical thresholds are broken, the price of Bitcoin might fall below $52,000.
Growing unpredictability in the Bitcoin futures market was brought to light by CryptoQuant. The site said that compared to past halving cycles, derivative traders are displaying significantly greater prudence. This prudence is especially noteworthy in light of the recent entry of new institutional participants into the market.
The BTC chart shows that decreasing financing and open interest rates are indicative of traders’ concern in the futures market. The entire number of outstanding derivatives contracts is known as open interest, and funding rates show how much it costs to retain long holdings in comparison to short ones.
Key price levels to watch
As per CryptoQuant, in the event that the price of Bitcoin drops below $60,000—which it is already trading at $61,723—it may see a downturn to $52,000. This possible decline may indicate a short-term bearish trend and constitute a large correction from the current levels.
But the research also pointed out how prevalent institutional Bitcoin Spot ETFs are in the market. By accumulating surplus supply from liquidations close to the $60,000 support level, these institutional investors may be able to stabilise the market and avert a more severe collapse.
Institutional involvement and market dynamics
One noteworthy development in recent months has been the growing participation of institutional investors in the bitcoin space. More and more institutional Bitcoin Spot ETFs are becoming the dominant players in the market.
Because they frequently have longer investment horizons, these institutional players could be more likely to accumulate Bitcoin during falls in price because they see them as chances to purchase rather than causes for alarm. As a result, their presence may be extremely important for maintaining market stability and the price at or near $60,000.
With the impending halving of Bitcoin, the cryptocurrency industry is ready for possible instability. Although it is concerning that CryptoQuant has predicted a collapse below $52,000, the significant number of institutional investors may offer some support for the price.
