Traders predict further declines for Bitcoin and Ethereum, with Bitcoin expected to drop to $55,000 and Ethereum to $1,500 amid ongoing market sell-offs.
Market Outlook
Traders are bracing for additional declines in Bitcoin and Ethereum prices following significant sell-offs in the market. Predictions indicate that Bitcoin may drop to around $55,000, while Ethereum could fall to approximately $1,500 before any potential recovery is seen.
On the Myriad prediction market, which is operated by Dastan, traders currently estimate a 77% likelihood that Bitcoin will decrease to $55,000 prior to a potential rise to $80,000. Similarly, there is an 88% probability for Ethereum to hit $1,500 before it could rebound to $3,000. This bearish sentiment has been amplified by a sell-off that occurred on Thursday, with Bitcoin trading at $59,511, reflecting a 1% decline in the last 24 hours and a total of 23% over the past month.
Bitcoin’s price hit a low of nearly $58,000 on Thursday, marking its lowest point since 2024. The decline is also mirrored in traditional markets, particularly with shares of Strategy (MSTR), a major treasury firm for Bitcoin, which dropped nearly 7% to around $88. Over the past month, these shares have seen a nearly 45% decline, and their preferred equity offering, STRC, has fallen by 22%, recently trading around $77—hitting an all-time low of $73.62 on Thursday.
Matt Hougan, Chief Investment Officer at Bitwise, stated that STRC is significantly influencing Bitcoin's price in the short term. He noted that, while macroeconomic factors such as inflation and interest rate concerns are at play, the market appears to be fixated on STRC’s performance in the $70s. There are fears that Strategy may need to liquidate its Bitcoin holdings, which could exert downward pressure until the company provides clarity on its plans.
Analysts suggest that Strategy's best course of action might involve bolstering its cash reserves to alleviate investor concerns regarding dividend obligations. Meanwhile, Ethereum is facing its own troubles, currently trading at $1,576, which represents a 2.6% decline in the last 24 hours and a more than 25% drop over the past month, placing it just above the predicted level of $1,500 on Myriad. According to Hougan, Ethereum is experiencing “collateral damage” due to the ongoing concerns surrounding STRC.
Forecasts from alternative prediction markets indicate a long-term bearish outlook for major cryptocurrencies, with Kalshi markets predicting a 36% chance that Bitcoin will fall below $40,000 by 2026, and a 34% chance that Ethereum will drop below $1,000. Currently, Bitcoin is approximately 53% below its all-time high of $126,080 from last October, while Ethereum remains over 68% below its peak of $4,946 from last August.
