Bitcoin's Wild Ride: Will $66K Hold? Experts Warn of More Ups and Downs

Bitcoin nears the $66,000 mark as analysts foresee more volatility ahead. Learn about market insights and the outlook for Ethereum.

Mar 22, 2024 - 04:57
Mar 22, 2024 - 04:58
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Bitcoin's Wild Ride: Will $66K Hold? Experts Warn of More Ups and Downs
Bitcoin's Wild Ride: Will $66K Hold? Experts Warn of More Ups and Downs

Bitcoin is inching closer to the $66,000 mark, signaling another milestone for the leading cryptocurrency. However, experts warn of potential market turbulence on the horizon.

During the Asian trading hours on Friday, Bitcoin saw a surge, testing the $66,000 level. Analysts suggest that this could be a prelude to increased volatility in the coming days.

Semir Gabeljic, Director of Capital Formation at Pythagoras Investments, highlighted the recent volatility in Bitcoin's price, attributing a 10% drop to significant outflows from the Grayscale Bitcoin Trust (GBTC) totaling around $300 million on March 20. Gabeljic noted that such fluctuations are typical before the BTC halving event, indicating the possibility of more ups and downs in the market.

While Bitcoin showed resilience, other digital assets experienced mixed performance. The CoinDesk 20 (CD20), which measures the liquidity of various cryptocurrencies, dipped slightly by 0.5%. On the other hand, CoinDesk’s Digitization Index (DTZ), tracking protocols like Ethereum Name Service (ENS), surged by 2.7% during Asian trading hours.

Singapore-based QCP Capital observed a consolidation phase in the market, with Bitcoin and Ethereum trading within relatively narrow ranges. The firm suggested that the market might stabilize after the previous weekend's volatility ahead of the Federal Open Market Committee (FOMC) meeting.

QCP Capital also noted significant outflows from the Grayscale Bitcoin Trust (GBTC), indicating a continued trend of BTC spot exchange-traded fund net outflows. Regarding Ethereum, QCP highlighted a diminishing likelihood of the approval of a spot ether ETF anytime soon.

The widening discount of the Grayscale Ethereum Trust (ETH) from -8% to -20% over two weeks supports this assessment. Prediction markets, such as Polymarket, also reflect this sentiment, with only a 21% probability assigned to the approval of an Ethereum ETF by May 31.

Regulatory scrutiny adds to the uncertainty surrounding Ethereum. The Securities and Exchange Commission (SEC) is reportedly investigating the Ethereum Foundation, raising questions about the classification of ether. The lack of clarity from the SEC further complicates the market outlook.

Despite these challenges, Ethereum continues to trade above $3,500, showing a modest 1.2% increase, according to CoinDesk Indices data. Investors are advised to monitor the market closely amidst expectations of further volatility in the coming days.

Also Read: Swissblock Warns Bitcoin Could Drop to $58k, Is the Crypto Boom Over?

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