What to expect from the Bitcoin price following last week's thrashing

Higher interest rates and bad news cycles have impacted investor sentiment on cryptos.

| More on:
A bitcoin trader looks afraid and holds his hands to his mouth among graphics of red arrows pointing down

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Bitcoin investors lost more than US$7 billion last week
  • The token has stabilised in recent days
  • Yet analysts don’t expect a sustained relief rally any time soon

The Bitcoin (CRYPTO: BTC) price isn't exactly rocketing back to new highs after the horror week just past.

But the world's biggest token by market cap has stabilised, at least.

At the time of writing, the Bitcoin price stands at US$20,401 (AU$29,408). That's just about where it was trading at this time yesterday, after hitting an overnight high of US$21,620, according to data from CoinMarketCap.

Like we said. Not shooting the lights out. But still some 17% above the US$17,709 lows the token hit on Sunday, its lowest price since 2020.

Why did the Bitcoin price tumble last week?

Bitcoin has been under pressure amid rising interest rates that have driven other cryptos, like the TerraUSD stable coin and its supporting token Luna, over the edge.

The end of historic low rates has seen most risk assets — think high-growth tech shares — sell off sharply.

Last week, the tech-heavy Nasdaq dropped 5%, despite Friday's rally.

The Bitcoin price fared even worse, with Glassnode reporting that crypto investors' realised losses on their Bitcoin holdings hit a record US$7.3 billion over the week.

Now what?

Looking ahead, the wider crypto market is unlikely to shake off its notorious volatility any time soon.

Feroze Medora, director of APAC trading at Cameron on the Gemini crypto platform, said (courtesy of Bloomberg), "A toxic mix of bad news cycles and higher interest rates has hurt the crypto market and we can anticipate more volatility in the upcoming weeks."

Glassnode noted in a report that fewer forced sellers in the months ahead could offer some support to the Bitcoin price. "With forced sellers appearing to drive much of the recent sell-side, the market might begin to eye whether signals of seller exhaustion are emerging over the coming weeks and months."

But any sustained relief rally looks to be some way off yet.

Discussing the recent Bitcoin price moves, Katie Stockton, founder of Fairlead Strategies, said (quoted by Bloomberg):

It's a very natural place to see some stabilisation, a kind of relief rally. We do think that relief rally would be muted, however, just given the downside momentum really across the board.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cryptocurrencies

A man holding a mobile phone walks past some buildings
Cryptocurrencies

The Betashares Crypto Innovators ETF (CRYP) is up 37% in a month. Is it too late to buy?

Looking at the CRYP ETF? Here's my take on whether it's too late to buy.

Read more »

Bitcoin ETF digital illustration.
ETFs

Why is the BetaShares Crypto Innovators ETF (CRYP) surging on Thursday?

Some massive Bitcoin news is lifting this ETF today.

Read more »

A woman holds a bitcoin token in her hand as she smiles at the camera in the background.
Cryptocurrencies

Bitcoin ETF approved. When is it coming to Australia?

Crypto bulls will be celebrating this milestone moment.

Read more »

person dancing in bitcoin spectacles wearing a gold outfit with hands up.
Cryptocurrencies

Bitcoin price rockets to 21-month highs. Here's why

The Bitcoin price is now up more than 174% in 12 months.

Read more »

BTC spelt out on wooden blocks with a red sign going down.
Cryptocurrencies

Bitcoin price sinks from 21-month high as ETF rumours swirl

What's going on with this cryptocurrency this week?

Read more »

person dancing in bitcoin spectacles wearing a gold outfit with hands up.
Cryptocurrencies

Up 145% in a year, the Bitcoin price just smashed through 18-month highs!

After a horror year in 2022, the Bitcoin price has come roaring back in 2023.

Read more »

Two investors look at a graphic showing a bitcoin in the centre
Cryptocurrencies

Why did the Bitcoin price just hit a 17-month high?

The long-standing cryptocurrency is finding its feet to reclaim a price not seen since May 2022.

Read more »

ETF written in gold with dollar signs on coin.
ETFs

This ASX ETF is up 21% in April so far

How on earth has this ETF smashed the market by a factor of 10?

Read more »