Bitcoin Faces Potential Price Correction

Despite a robust equity market and favorable U.S. crypto policies, bitcoin (BTC) may be heading for a deeper price correction in the coming weeks, influenced by miner selling activity and general profit-taking. Alex Kuptsikevich, a senior market analyst at FxPro, noted the gradual shift away from risk assets and a pattern of declining intraday highs for bitcoin in a recent communication to CoinDesk.

Bitcoin is currently testing the resilience of the 50-day moving average repeatedly without a substantial drop, a scenario that Kuptsikevich believes could quickly benefit bears aiming for a target of $60,000. Contributing to this outlook is the activity of bitcoin miners, who are under financial pressure to liquidate holdings to maintain operations, especially after the network’s recent halving in April, which impacts their revenue.

Japanese crypto exchange bitBank analysts pointed out that since May, the net position of bitcoin miners (BTC inflow minus outflow) has been on a decline, indicating tighter operations. While miner sell-offs don’t necessarily pressure bitcoin prices directly, they tend to lead to price stagnation.

Recent on-chain data from CryptoQuant highlighted an uptick in BTC transfers from mining pools to exchanges, hitting a two-month peak on June 9. This aligns with a surge in selling through professional over-the-counter desks, marking the largest daily volume seen since late March.

In contrast, bitcoin’s price saw a brief surge from $68,000 to $70,000 following cooler-than-expected U.S. CPI data in May. However, this gain was short-lived as the Federal Open Market Committee (FOMC) adjusted its rate cut forecast for the year, dampening investor enthusiasm.

Amidst these developments, major cryptocurrencies like BNB Chain’s BNB, XRP, and Solana’s SOL have declined by more than 10% since Monday. Similarly, riskier assets like dogecoin (DOGE) and shiba inu (SHIB) have shed 15% of their value. This downturn coincides with significant outflows from U.S.-listed spot BTC exchange-traded funds (ETFs), which have experienced their heaviest withdrawals since April.

Additionally, bitcoin’s correlation with the Nasdaq technology index has weakened, indicating a potential decoupling from tech-heavy stock performance. Market analysts also express concern for ether (ETH), which appears to be in a weaker position than bitcoin. According to Rachel Lin, CEO of SynFutures, unless ETH reclaims the $3,700 level soon, it could face more significant losses.

For bitcoin, maintaining the $67,000 level is critical for short-term stability, though the long-term outlook remains bullish, Lin added. This complex interplay of market dynamics highlights the intricate balance of factors driving cryptocurrency valuations.