Bitcoin (BTC) bears are eyeing a break below the key psychological $60,000 level, with ETF flows having slowed this week, and macro headwinds continuing to pile up, with some predicting that the Bitcoin price could be headed towards $50,000 next.

The Bitcoin price briefly dipped as low as the $59,800s on Wednesday. But the world’s largest cryptocurrency by market capitalization has since recovered to the $60,400s, down around 5% on the day.

According to data presented by The Block, net ETF flows have been negative so far this week. That’s thanks to continued, albeit still slowing GBTC outflows of $110 million on Monday and $80 million on Tuesday.

At current levels, the Bitcoin price is down around 18% since the record highs it posted near $74,000 last month.

Macro Risks Grow

But as macro headwinds grow ahead of the halving on Saturday, price risks could be tilted towards further losses.

US bond yields and the US Dollar Index (DXY) recently vaulted up to their highest levels since last November.

US economic data has come in stronger than expected in recent weeks, forcing the Fed to turn more hawkish. Fed Chair Jerome Powell emphasized a lack of progress on inflation this week.

All this has forced investors to substantially downsize Fed rate cut bets. As per the CME’s Fed Watch Tool, the money market implied probability of a July rate cut has faded to under 45% from around 80% one month ago.

This has hit risk assets across the board. As Bitcoin probes $60,000, the S&P 500 is down 5% from its recent peak and at its lowest in nearly two months.

Of course, elevated geopolitical tensions in the Middle East between Iran and Israel have also dented sentiment recently. The threat of another major war that could have an equally disruptive impact on global oil supply continues to hang.

Bitcoin Halving to Suppress the BTC Price

Nerves are also growing that the upcoming Bitcoin halving could be a “sell-the-news” event.

Widely followed crypto research house 10x Research recently predicted that miners could dump $5 billion of BTC after the halving.

The sell pressure could continue for as much as 4-6 months, meaning the next leg higher in the BTC market might have to wait until October this year.

Bitcoin miners could sell $5 billion worth of BTC after halving , analysts at 10x Research believe .
The pressure on BTC from miners can continue for 4-6 months, and only then will a “post-halving rally” begin.
This has happened historically, analysts say. The chart shows an… pic.twitter.com/gyxniDON8h

— Crypto 4 Light (@vladi4light) April 15, 2024

That’s plenty of reasons for Bitcoin investors who are sat on substantial paper gains to take profit.

Here’s Where the Bitcoin Price is Headed Next

After its bearish break out of its recent pennant structure consolidation pattern last weekend, Bitcoin’s technical outlook took a turn for the worse.

However, now it has hit $60,000 and tested its March lows, the first profit-target of the bears has been hit.

The key question now is whether Bitcoin can hold above $60,000 support.

All of the above-mentioned arguments – i.e. slowing ETF flows, growing macro headwinds, potential post-halving sell pressure – suggests risks are tilted to a near-term break into the $50,000s.

However, it’s worth noting that the latest pullback in the Bitcoin price has flushed significant froth out of the market.

As recently as the 28^th of March, the value of open leveraged futures positions (or open interest) was $36.31 billion. It was last 22% lower at $28.64 billion, as per coinglass.com data.

Meanwhile, funding rates to open leveraged Bitcoin futures positions recently flipped negative for the first time in over 6 months.

This suggests weakness in demand amongst traders to take out leveraged long bets, and perhaps rising appetite to go short.

A less frothy market suggests that the foundations are there for a more sustained recovery in the price.

That being said, if fundamentals continue to deteriorate, a sustained breakdown into the $50,000s remains the most probably outcome.

Once the $60,000 support zone goes, a swift drop back to the next major support level at $53,000 is likely.

Investors to Buy the Dip?

But once the BTC price drops back to these areas, we could see major investors stepping in to buy the dip.

Bitcoin’s long-term outlook remains highly positive. The narrative that it is “digital gold” continues to gain ground.

Many major US brokerages and wirehouses are yet to offer spot Bitcoin ETFs to clients, so access will continue to widen.

US government deficit spending is likely to remain high on election year. And the US election could see the US regulatory landscape swivel more pro-crypto.

Meanwhile, the Fed is still expected to start cutting rates, just a little later than the market’s had been hoping.

Meanwhile, once post-halving miner sell pressure eases, the lower BTC issuance rate will start acting as more of a tailwind.

On Saturday, the rate of BTC issuance to miners will drop 50% from 6.25 BTC per block to 3.125.

Bitcoin remains on course to hit and likely exceed $100,000 in the coming years. And if anything happened to force the Fed to start cutting interest rates sooner, expect the gains to come sooner.

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.