Bitcoin Price Prediction: Is a Short-Term Drop Followed by a Surge Possible?

Bitcoin Price Outlook: What the Market Could Look Like After the Fed’s Decision

Bitcoin Price Prediction – Bitcoin (BTC) is currently under a strong accumulation trend, despite the ongoing price fluctuations between $91k and $105k. According to Joao Wedson, founder of crypto analytics firm Alphractal, nearly 5 million BTC have left exchanges since 2020. This suggests a significant “holding” strategy among investors, reflecting their commitment to long-term positions.

Bitcoin Outflows from Exchanges Indicate a Supply Squeeze

Since February 2020, 4.85 million BTC have exited exchanges, signaling a substantial shift in market dynamics. As Wedson pointed out, “The Exchange Flux Balance shows a massive shift. Since 2020, the game has changed—everyone wants Bitcoin at all costs.” The massive outflows from exchanges mean that there are fewer BTC for sale, leading to a potential supply squeeze. This could create conditions for a price rally, as low selling pressure might trigger a significant price surge for the king coin.

Negative Exchange Flows and Short-Term Accumulation

IntoTheBlock also observed that exchange flows have been negative since January 21, signaling ongoing accumulation despite the price drop from $109k to $97k, followed by a bounce back to $100k. During this period, strong bids absorbed the selling pressure, further reinforcing the notion that accumulation is in play.

Decreased Selling Pressure on Binance: Another Bullish Sign

A similar drop in selling pressure on the Binance exchange was also noted. CryptoQuant observed that taker sell volume dropped significantly in the past week, indicating weakness among short-sellers. With the diminishing influence of sellers, buyers might step in, possibly triggering an upward move in the short term.

Contrarian View: Arthur Hayes Predicts Short-Term Drop

However, Arthur Hayes, co-founder of BitMEX, took a contrarian view. He forecasted a 30% drop, bringing Bitcoin’s price down to $70k-$75k before a potential rally to $250k by the end of 2025.

In conclusion, while there are signs of accumulation and a potential supply squeeze, opinions vary on Bitcoin’s near-term price action. The upcoming Fed rate decision may provide further clarity on these expectations.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.