Crypto markets have opened April with a downtick, and now retail investors are asking ‘Why is Bitcoin down today?’ and ‘Why is crypto down?’ – in this article deep-dive Bitcoin price tumble to find out what’s next for BTC ahead of the Halving Event in 19 days.
Bitcoin (BTC) and the broader cryptocurrency market are bleeding this morning. To illustrate, the total crypto market cap is down 5% to $2.51 trillion on the last day.
So far, the dip has been led mainly by the fall of Bitcoin, which represents a substantial slice of the overall cryptocurrency market cap.
At press time, the world’s most valuable coin is trading at around $66,000, down roughly 5% in the past trading day.
Even amongst altcoins, Ethereum (ETH) with its deeper liquidity, still wasn’t spared the chop, as ETH was down -6% on the previous trading day.
This comes amid a spike in average trading volume over the past 24 hours, suggesting either a possible capitulation or doubling down among sellers.
Other major altcoins, including Ripple (XRP) and Solana (SOL), are also under pressure, trading below crucial support levels, now resistance at $0.66 and $200, respectively.
The dip might be a play of both technical and fundamental factors, but 99Bitcoin’s analysts have identified two main reasons why Bitcoin and crypto prices are down today.
#1 – Technical Correction: Impact of Bitcoin on Altcoins
Bitcoin is down -10% from all-time highs or around $73,800. While the pain is evident, it is also important to consider historical context.
Traditionally, Bitcoin retraces 50-70% after posting sharp gains. This was seen post-2017 and 2021, during the last crypto booms.
(BTCUSDT)
So, the current pullback in BTC price could be a sign of a healthy market correction, not necessarily a cause for panic.
This should be the case, especially after the wide bull bar by the close of March 2024, if anything, Bitcoin, and indeed, most altcoins, closed Q1 2024 strongly after an impressive resurgent performance.
First Monthly Candle Close above old All Time Highs of ~$69,000
This is historic$BTC #Crypto #Bitcoin pic.twitter.com/cOVDPOKnei
— Rekt Capital (@rektcapital) April 1, 2024
Prices have been consolidating horizontally after a re-calibration lower in recent days. In Bitcoin’s case, the slowdown of the GBTC‘s outflow has helped slow the tumble. Even if inflows into the other nine spot Bitcoin ETFs, including those offered by Fidelity and BlackRock, have been slowing down in recent weeks.
If BTC is to recover, investor sentiment will be crucial in influencing prices. In Q2 2024, prices will be shaped mainly by how fast investors channel funds to spot Bitcoin ETFs in the weeks leading up to the Halving Event on April 20.
A contraction might see BTC fall even further, possibly towards $60,000 or lower.
#2 – Better Than Expected Factory Data In The United States
On April 1, Manufacturing PMI data in the United States showed that manufacturing activity sharply expanded after 16 consecutive months of contraction.
“The Manufacturing PMI registered 50.3 percent in March, up 2.5 percentage points from the 47.8 percent recorded in February,” said Timothy R. Fiore, the Institute for Supply Management (ISM) Manufacturing Business Survey Committee Chair.
“The overall economy continued to expand for the 47th month after one month of contraction in April 2020.
“The United States manufacturing sector moved into expansion for the first time since September 2022. Demand was positive, output strengthened, and inputs remained accommodative.”
(US PMI)
Following this news, the USD strengthened, pushing commodities, such as Bitcoin and crypto prices, even lower. Crypto weakness continued in the Asian session.
The fact that manufacturing activity in the country is improving might influence how the “data-driven” Federal Reserve acts in the coming months.
Analysts told Bloomberg that the stellar Manufacturing PMI performance might see the central bank reduce the number of projected interest rates cut in 2024.
As seen throughout 2022, when rates were relatively high, crypto assets like Bitcoin suffered, falling harder from all-time highs.
The Bottom Line: Don’t Fear Pre-Halving Bitcoin Price Dip – Hodl!
Bitcoin price has mounted an incredible performance so far in 2024, with markets witnessing the first ever new all-time high pre-halving event (triggered by spot BTC ETF inflows).
However, a pre-Halving Event dip is a typical occurrence in the crypto market, and this reassures investors that the ongoing cycle remains predictable.
With prices down, this represents a valuable opportunity for investors to stack their portfolios ahead of the major supply shock event on April 20, so as the saying goes hodl and buy the dip.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
