Analysts predict that as Bitcoin approaches $100,000, there may be short-term consolidation due to profit-taking, despite a positive long-term outlook. The rise of gold has fueled this sentiment, suggesting Bitcoin’s role as digital gold is strengthening. Investor sentiment, however, remains fearful with significant outflows from exchange-traded funds and the appearance of a death cross, indicating potential downside risks.

As Bitcoin approaches the significant milestone of $100,000, analysts foresee a likelihood of short-term consolidation despite a generally favorable long-term trajectory for the cryptocurrency. Key psychological thresholds often lead to profit-taking, yet the recent surge in gold prices indicates a growing momentum for alternative assets, including Bitcoin.

Analysts from Matrixport highlighted how the sentiment shift that commenced in the summer of 2023, coinciding with gold surpassing $2,000, has positively influenced Bitcoin’s outlook. The narrative that Bitcoin serves as “digital gold,” popularized by investment firm BlackRock, has bolstered this perception.

Markus Thielen, an independent analyst, stated, “Regardless of the prevailing narrative, both gold and Bitcoin are poised to grow in importance as alternative assets gain momentum. While key psychological levels—such as gold at $3,000 or Bitcoin at $100,000—could trigger short-term consolidation, the broader uptrend likely remains intact.”

Nevertheless, Bitcoin presently contends with both risks and opportunities. Notably, the fear and greed index has left the extreme fear zone (18) but remains in the fear zone at 22. Historically, Bitcoin and other cryptocurrencies have performed better when the index reflects greed. This persistent fear is evident in the recent outflows from spot Bitcoin exchange-traded funds, which saw $143 million withdrawn, culminating in total weekly outflows of $870 million for five consecutive weeks.

Moreover, Bitcoin faces a technical concern with the formation of a death cross; the intersection of its 50-day and 200-day Weighted Moving Averages hints at potential downward movement in its price.

In summary, as Bitcoin nears the $100,000 mark, analysts predict a possibility of short-term profit-taking leading to consolidation. While the long-term outlook remains bright, bolstered by gold’s performance, investor sentiment remains cautious. The fear and greed index indicates prevailing fear among investors, alongside recent outflows from Bitcoin exchange-traded funds which highlight this cautious approach. Furthermore, the emergence of a death cross signals potential downside risks for Bitcoin’s price movements.

Original Source: crypto.news

Related posts:

Bitcoin Price Drops Below $90k Amid Low Trading Activity and Market Weakness Matrixport Analysts Warn of Bitcoin Challenges Amid Tightening Liquidity Bitcoin Supply Crisis: Institutional Interest Could Propel Prices to $200,000 Bitcoin Price Analysis: Resilience Amidst Institutional Support and Market Consolidation