Why is Bitcoin (BTC) Falling? When Will It Bottom Out? Binance Answers All, Gives a Date!

After rising above $82,000 in the first week of May, Bitcoin (BTC) has once again entered a downward trend.

As Bitcoin’s decline extends below $70,000, the question is whether the local low of $60,000 seen in February will be retested.

While the reasons for the ongoing decline in Bitcoin and the market are being wondered about, a comprehensive analysis has come from Binance Research.

According to Binance Research’s analysis, the decline in Bitcoin and cryptocurrencies is due to funds flowing into US stocks. The bottom is predicted to be reached within 20 weeks.

Binance Research analysts say the recent weakness in the cryptocurrency market, including Bitcoin, stems from a global liquidity flowing into US exchanges rather than a cryptocurrency-specific crash.

Accordingly, capital is concentrated in US stock markets, leaving Bitcoin and cryptocurrencies on the sidelines.

Analysts point to the Cboe S&P 500 Distribution Index as a key indicator of this trend.

According to Binance, this index rose to 42. This is the third highest level on record and indicates that capital flows within the S&P 500 are concentrated in a narrow theme.

Binance Research has identified AI, semiconductors, defense, energy, and commodities as sectors attracting capital inflows. At this point, Bitcoin remains outside the main capital flows of the market, which is causing it to decline.

Binance Research noted that unless there is a cryptocurrency-specific crisis, capital inflows into US equities are generally temporary, adding that this could be a signal of a bottoming out.

Analysts, based on historical data, emphasized that Bitcoin tends to quickly form a market bottom following periods of such extreme macroeconomic concentration.

According to Binance, in the past, after periods when concentration in US stocks reached extreme levels, Bitcoin typically bottomed out within 20 weeks.

*This is not investment advice.