Recently, the price movements of Bitcoin and the associated risks have been at the forefront of investors' concerns in the cryptocurrency market. Katalin Tischhauser, Head of Investment Research at Sygnum, points out the double top formation forming around $100,000 for Bitcoin, indicating that investors should approach with caution. However, despite market sensitivity and potential volatility, she states that the likelihood of large-scale collapses as seen in the past is low.
In recent months, technical analysis tools have come to the forefront. The fluctuation of Bitcoin between $110,000 and $100,000 is slowing the upward momentum, and experts warn that severe declines could occur if the double top formation breaks. If critical support levels are broken, it is mentioned that Bitcoin could experience value losses of up to 75%, similar to the past. However, according to Tischhauser, technical signals alone are not sufficient for such dramatic movements.
Tischhauser states, "The crypto market largely moves based on market sentiment; making fundamental valuations is difficult. A major collapse can only occur in the case of an unexpected crisis like Terra or FTX. With the current political and regulatory support, we can see a long-term upward trend."
Institutional Interest and Market Dynamics
Since 2024, the interest of institutional investors in Bitcoin has notably increased. Billions of dollars of capital have entered Bitcoin funds traded on Nasdaq since the beginning of the year. Additionally, Bitcoin is becoming more common as a store of value in companies' portfolios.
According to current data, a total of 841,693 Bitcoins are held in the accounts of 141 publicly traded companies worldwide. These institutional investments create continuous demand in the market, contributing to the stabilization of prices.
Tischhauser explains, "Institutions are incorporating Bitcoin into their portfolios after detailed analyses, and these investments are generally long-term. This newfound institutional demand will have a supportive effect on prices in the medium term."
Halving Cycle and Changing Market Conditions
The halving of Bitcoin, which occurs every four years, generally leads to rapid increases in prices, but the impact of the last halving cycle in 2024 is seen to be diminishing. Now, institutional investors and general liquidity movements have become more decisive in market dynamics.
Tischhauser states, "Market leadership is changing, and therefore the impact of the four-year halving cycle is not as strong as it used to be. The selling pressure from miners now constitutes only a very small portion of daily trading volume. The reduction in supply is becoming less effective on the market than before."
Experts point out that significant price changes in Bitcoin are often triggered by unexpected events. Nowadays, a more resilient market structure has emerged due to institutional interest. Nevertheless, it is crucial for investors to closely monitor macro developments alongside technical analyses.
We have entered a period where institutional demand and new market dynamics are determining price movements in Bitcoin. As traditional cycles are replaced by different power balances, investors are advised to focus more on current trends rather than past experiences.
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