Bitcoin Faces Potential Downtrend Following Record High; Analysts Forecast Potential Bullish Reversal
Summary:
Bitcoin experienced a significant decline of over 17.5% only a week after hitting a record high of approximately $73,800. With factors such as the Federal Reserve sustaining its key interest rates and continuous withdrawals from Bitcoin ETFs playing a role, projections suggest Bitcoin might dip below the $60,000 threshold by month-end. Analysts also speculate a potential correction towards $40,000, based on past pre-halving price trends. However, history and Fibonacci retracement levels suggest a likely future bullish reversal to a new high, with possible consolidation in the $50,000-60,000 range.
Bitcoin (BTC) suffered a price drop of over 17.5% only a week after establishing its new all-time high near $73,800. By March 20, BTC had plummeted to a low not seen in the last two weeks, hitting a $60,760 mark. This downward trend in Bitcoin's cost seems to align with expectations that the Federal Reserve will hold its focal interest rates within the present 525-550 basis points range. Coupled with steady withdrawals from Bitcoin exchange-traded funds (ETFs), the price pressure builds.
Examining the depth of this correction, Bitcoin's value may dive under the $60,000 benchmark before the month runs out. Making projections from the current market correction, Bitcoin might arrange itself towards its 50-day exponential moving average (50-day EMA) around $58,780. This EMA spiral has been key in restricting Bitcoin's previous correction back in January 2024.
This 50-day EMA coincidentally intersects with Bitcoin’s flat support level circling $59,310. A level that, following a test on March 5th, was subsequently followed by a 24.5% price jump.
Rekt Capital, a market analyst, suggests that Bitcoin may continue its market correction towards a low of $40,000, examining pre-halving price trends of Bitcoin. In this fractal analysis view, a drawn-out correction to an ascending trendline of around $40,000 puts Bitcoin in a precarious "Danger Zone".
Observing the past, Bitcoin’s value plunged around 50% in the buildup to the 2020 halving, a setback exacerbated by the global pandemic in March. Despite this, Bitcoin maintained its position around the $10,000 mark for the remainder of that year, setting itself up for a revival in 2021.
History repeated itself around the 2016 halving when Bitcoin pulled back 33%, but ultimately bounced back by the end of the year. This later morphed into a bull’s run in 2017, climaxing at a peak price of $20,000.
This ongoing price correction in Bitcoin following a fractal analysis suggests a potential bullish shift to a new record high is probable.
Simultaneously, Fibonacci retracement levels indicate Bitcoin will likely settle within a consolidation phase between $50,000-60,000 in the upcoming days or weeks.
Looking back, BTC's value has frequently retested the "Golden Ratio" or the 0.618 level after reaching or surpassing an all-time high. This history suggests Bitcoin's future support level could be somewhere around $50,000.
Published At
3/20/2024 4:40:37 PM
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