Bitcoin Price Analysis: BTC Plunges Towards $80,000, Wipes Out Weekly Gains

The crypto market saw a significant downturn on Friday as major cryptocurrencies, including Bitcoin (BTC), registered substantial declines. The flagship currency plunged below $85,000 late on Friday, wiping out its weekly gains as selling pressure threatened to overwhelm buyers. BTC is down almost 3% and is trading around $82,800. 

BTC and the broader crypto market’s drop coincided with a sell-off in the US stock market due to poor economic data. Crypto-focused stocks also suffered heavy losses. 

Bitcoin Could Drop To $72,000 Due To Macro Liquidity Concerns

Bitcoin (BTC) made a strong start to the week, surging to an intraday high of $88,839 on Monday. However, buyers lost momentum after reaching this level as selling pressure intensified. Bearish sentiment has intensified over the past few days, with BTC plunging below $85,000, giving up gains made during the week. BTC’s rejection occurred at the cusp of its descending trendline and at the upper range of its ascending channel pattern. 

An analysis from Capital Flows indicated that BTC could correct to $72,000 if liquidity conditions remain unchanged. According to the analysis Bitcoin is exhibiting a greater convergence with traditional risk assets. However, it remains at the periphery of the risk curve, implying that for capital to flow back into BTC, investors must shift their mindset from focusing on less risky assets to riskier assets like crypto. 

“Broadly speaking right now, the macro liquidity backdrop is neutral. Rates have come down marginally, but the carry trade continues to create risk for assets.” 

However, other analysts have pointed out that a rise in the Global M2 supply could trigger a BTC rally. The Global Liquidity Chart, which monitors M2 growth from central banks, has historically formed a correlation with Bitcoin’s price movements. According to Colin Talks Crypto, a predictive correlation between M2 supply and BTC suggests the flagship cryptocurrency could rally around May 1. However, the difference between macro liquidity and global M2 growth is that M2 measures total money supply, while macro liquidity indicates the ease at which capital can flow into risk assets. 

Crypto-Related Stocks Plunge 

Shares of Mara Holdings (MARA), Strategy (MSTR), and several other crypto-related companies plunged as the price of Bitcoin registered a substantial decline on Friday. MARA fell over 9%, while MSTR registered a drop of 10%. Coinbase (COIN) also registered a significant decline, falling 7%. Meanwhile, Bitcoin slipped below $85,000 as selling pressure intensified. Ethereum (ETH) and other cryptocurrencies also registered notable declines. Stocks related to the crypto industry often follow Bitcoin higher or lower. The crypto market and stocks fell on Friday after the latest inflation and consumer sentiment data numbers raised concerns about the economy. 

Nintendo Could Leverage $14B In Cash To Invest In Bitcoin

According to market predictions, Nintendo may use Bitcoin on its balance sheet after GameStop announced its plans to invest in the asset. The company holds over $14.8 billion in cash, allowing the firm to implement a Bitcoin strategy. GameStop recently grabbed headlines after announcing plans to invest in Bitcoin. GameStop stock surged over 11% following the news, indicating that publicly traded organizations are increasingly interested in Bitcoin adoption. Nintendo’s substantial cash reserves could allow the company to implement Bitcoin strategies similar to GameStop. Analysts predict Bitcoin adoption could lead to better stock market results and introduce new portfolio assets for the company.

Bitcoin (BTC) Price Analysis 

Hopes for a market recovery dissipated on Friday as a market-wide rout erased all gains made earlier this week. BTC plunged below $85,000 and is struggling to stay above $82,000. BTC’s substantial drop coincided with a major sell-off in US stocks after poor economic numbers and inflation data spooked markets. As a result, the S&P 500 dropped 2% while Nasdaq shed almost 3%. Crypto stocks also registered significant losses, with Strategy (MSTR) falling 10% and Coinbase (COIN) shedding nearly 8%. The February PCE report showed a 2.5% year-over-year increase in the price index, with core inflation sitting at 2.8%, slightly above expectations. Meanwhile, consumer spending registered a rise of 0.4%. However, inflation-adjusted figures indicate minimal growth, suggesting potential headwinds for growth. 

Meanwhile, the Federal Reserve of Atlanta’s GDPNow Model projects a 2.8% contraction in the US economy in the first quarter. 

BTC registered a substantial increase on Wednesday, moving past the 20 and 200-day SMAs. However, it lost momentum on Thursday, slipping below the 20 and 200-day SMAs and settling at $84,215. Price action remained bearish on Friday and Saturday as BTC registered marginal declines and settled at $83,822. However, sentiment changed on Sunday as bullish sentiment returned. As a result, BTC rose almost 3%, moving past the 20 and 200-day SMAs and settling at $86,116. BTC surged to an intraday high of $88,839 as it started the week on a bullish note. However, it could not stay at this level and settled at $87,523, ultimately registering an increase of 1.63%.

Source: TradingView

However, it lost momentum on Tuesday after encountering selling pressure and volatility. As a result, the price registered a marginal decline and settled at $87,417. Sellers retained control on Wednesday as BTC slipped below $87,000 and settled at $86,942. The price registered a marginal increase on Thursday to reclaim $87,000 and settle at $87,236. However, markets turned bearish on Friday, driven by a sell-off in the traditional markets. As a result, BTC dropped over 3%, slipping below the 200-day SMA and $85,000 to settle at $84,422. The current session sees BTC down over 2%, falling below the 20-day SMA and trading around $82,632. If sellers retain control, the price could drop to $80,000. A break below this level could drag BTC towards $75,000. The MACD indicates a bearish tilt while the RSI is below the neutral zone, indicating that bears have the upper hand.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.