Bitcoin price continued its decline on April 17, as the market eagerly anticipated the upcoming Bitcoin halving event, scheduled for April 20. Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin (BTC) dropped as much as 7.5% to an intra-day low of $59,648, after opening at $63,814 on April 17.
Several factors contributed to Bitcoin’s price correction, including the escalating geopolitical conflict in the Middle East, a slowdown in demand for spot Bitcoin exchange-traded funds (ETFs), a strengthening U.S. Dollar Index (DXY), and a weakening technical setup.
The decline in Bitcoin ETFs inflows has added to the sell-side pressure. On April 16, ETFs saw net outflows totaling $58 million. Notably, the Grayscale Bitcoin Trust (GBTC) and ARK 21Shares Bitcoin ETF (ARKB) experienced outflows of $79.4 million and $12.9 million, respectively. Most ETF issuers recorded zero flows in recent days, raising concerns among market participants.
Bloomberg ETF analyst James Seyffart explained that the absence of flows is not a cause for concern, as it is a typical occurrence for most ETFs. Seyffart clarified that ETF shares are created and redeemed only when there is a significant mismatch in supply and demand and the cost to do so is lower than hedging. Minor mismatches are handled by market makers, similar to trading stocks.
The U.S. Dollar Index (DXY) recorded its best five-day run in 14 months, rising 2.56% from its April 10 low of 103.52 to a six-month high of 106.169 on April 16. The strengthening of the dollar is attributed to expectations of sustained higher interest rates, which encourage foreign investors to seek greater returns on bonds and term deposits, increasing demand for the dollar.
From a technical perspective, the U.S. Dollar Index is expected to rise by more than 0.87% toward its November 2023 high at $106.757.
In terms of Bitcoin’s price action, traders are closely monitoring crucial levels for the cryptocurrency. Independent trader Ali highlighted that Bitcoin’s UTXO realized price distribution (URPD) indicated that the $62,000 level was a crucial support level. However, BTC has lost this support and it has now become a strong resistance area for bulls.
According to IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model, over 1.15 million addresses previously bought approximately 630,110 BTC at a price range of $62,858 to $64,670. The IOMAP chart also showed that Bitcoin is facing significant resistance in its recovery path, suggesting that the path of least resistance is downward.
Please note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions.