Why Is Bitcoin (BTC) Falling? When Will It Reach Bottom?
After Bitcoin (BTC) surpassed the $82,000 mark during the first week of May, it once again entered a downward trend.
As Bitcoin continues to trade below the $70,000 level, investors are questioning whether the local low of $60,000, recorded in February, will be tested again.
While the reasons behind the ongoing decline in Bitcoin and the broader cryptocurrency market remain a topic of debate, Binance Research has released a comprehensive analysis.
According to Binance Research, the decline in Bitcoin and other cryptocurrencies is linked to capital inflows into U.S. equities. The report suggests that a market bottom could be reached within 20 weeks.
Binance Research analysts argue that the recent weakness in the cryptocurrency market, including Bitcoin, is driven by a global shift of liquidity toward U.S. stock markets rather than by a crypto-specific collapse.
As a result, capital is concentrating in U.S. equities, leaving Bitcoin and cryptocurrencies on the sidelines.
Analysts point to the S&P 500 concentration index published by Cboe Global Markets as a key indicator of this trend.
According to Binance, the index has risen to 42. This is the third-highest level ever recorded, indicating that capital flows within the S&P 500 are becoming concentrated in a narrow set of themes.
Binance Research analysts identified artificial intelligence, semiconductors, defense, energy, and commodities as the primary sectors attracting capital inflows. At present, Bitcoin remains outside the main streams of market capital, contributing to its decline.
The analysts noted that unless a crisis directly related to cryptocurrencies emerges, capital inflows into U.S. equities tend to be temporary, adding that this may be a signal that the market is approaching a bottom.
Based on historical data, the analysts emphasized that following periods of such extreme macroeconomic concentration, Bitcoin has generally reached its bottom relatively quickly.
According to Binance, in the past, after periods when concentration in U.S. equities reached extreme levels, Bitcoin typically formed a market bottom within 20 weeks.
See also: "Standard Chartered: “Today May Be the Day Ethereum Starts Outperforming Bitcoin”"
Українська
Русский
English

