Bitcoin Price Forecast Fund Manager Cautions About Possible Recurrence of May 2021 Crash

Bitcoin Price Forecast: Fund Manager Cautions Against Potential Crash Similar to May 2021


By Arslan Butt
Last Updated:
July 5, 2024, 04:42 EDT
|
3 min read


Bitcoin Price Forecast
In a recent Bitcoin price forecast, fund manager Andrew Kang delivered a stark warning about the possibility of a crash reminiscent of May 2021.
Kang pointed out the current market’s vulnerability due to an extended trading range and heightened levels of cryptocurrency leverage. His analysis suggests that if Bitcoin breaks below this four-month range, it could trigger a significant downturn, potentially pushing prices down to the $40,000 range.
This scenario would mirror the sharp correction witnessed in May 2021, when Bitcoin and other cryptocurrencies plummeted sharply after a period of rapid appreciation.
Bitcoin Price Dips Below $54,000 Due to Mt. Gox Repayment Strategy
Bitcoin recently dipped below $54,000, driven by Mt. Gox’s transfer of $2.7 billion worth of BTC to a new address. This transfer is part of preparations for a $9 billion repayment to creditors starting in July, causing anxiety in the market.
Over the past week, Bitcoin has declined nearly 12%, with a 7.5% drop occurring in the last 24 hours. The broader cryptocurrency market has also felt the impact, with Ethereum slipping below $3,000 and Binance Coin trading around $470.
Key points:
Bitcoin is currently trading above $54,000 but remains volatile.
Recent fluctuations highlight the market’s sensitivity to significant movements.
The broader cryptocurrency market is also experiencing declines.
In summary, anxiety stemming from the Mt. Gox transfer and upcoming repayments has led to Bitcoin’s drop below $54,000, underscoring ongoing volatility and market sensitivity.
Impact of Weakening USD and Expected Fed Rate Cuts on Bitcoin
The US dollar continues to weaken, declining further as markets increasingly anticipate Federal Reserve interest rate cuts in September, possibly extending into December.
This trend follows weaker US economic data, resulting in the USD falling for the fourth consecutive day to its lowest level in over three weeks. This depreciation provides substantial support to the cryptocurrency market, enhancing the appeal of assets like Bitcoin.
Traders eagerly await the US Non-Farm Payrolls (NFP) report, which will influence Federal Reserve interest rate decisions. Analysts expect the report to indicate a gain of 190,000 jobs in June, down from 272,000 in May.
The unemployment rate is projected to hold steady at 4%, indicating labor market stability. However, the growth in Average Hourly Earnings may slow to a 3.9% annual increase, down from 4.1% in May.
Key points:
The USD’s decline bolsters the crypto market.
The NFP report is crucial for future Fed rate determinations.
Expected Fed rate cuts could elevate Bitcoin as an alternative investment.
These figures will be closely monitored for insights into the health of the US economy and potential implications for Federal Reserve policy. The weakening USD and anticipation of Fed rate cuts could underpin Bitcoin (BTC) prices as investors seek alternatives amid economic uncertainty.
Bitcoin Price Forecast
Bitcoin (BTC) is currently trading at $53,980, down 4.62%. On the 4-hour chart, the pivot point stands at $55,180. Immediate resistance levels are $57,090, $58,510, and $60,220.
Immediate support is at $53,140, with further support at $51,720 and $49,910. The Relative Strength Index (RSI) stands at 17, indicating extremely oversold conditions.


Bitcoin Price Forecast – Source: Tradingview
The 50-day Exponential Moving Average (EMA) is positioned at $60,510, suggesting a bearish trend as long as prices remain below the pivot point.
A breakthrough above $55,180 might signal a shift to bullish momentum, while remaining below this level keeps the bearish outlook intact.
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Bitcoin Price Forecast 2024 – 2034
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.