Brace for a Strong Bitcoin Correction: Here’s Why
After the long-awaited approval of a spot-Bitcoin ETF, investors have not seen the price trajectory they had hoped for. Bitcoin’s price has experienced a downturn, falling below the $40,000 threshold, and this may just be the beginning.
A Potential Downturn for Bitcoin
A weekly chart close below the $38,000 mark indicates a potential downturn for Bitcoin. There is a robust support cluster around $33,000, which includes the lower boundary of a parallel channel, the 0.5 Fibonacci retracement level, and the 50-week simple moving average. These technical components create a strong line of defense against further declines in the price of Bitcoin.
Historical Movement as a Possible Prediction
Looking at historical price movement can provide insight for investors. In previous notable events, such as the commencement of Bitcoin futures trading in December 2017 and the approval of the Bitcoin futures ETF in October 2021, Bitcoin experienced surges followed by significant corrections. A similar pattern unfolded in January 2024 with a more moderate correction of 20% so far.
Could Whales Be to Blame for Correction?
Large holders of specific digital assets, known as whales, can directly impact cryptocurrency prices through their trading moves. Recent data shows notable activities among cryptocurrency whales in different holding brackets. Wallets with values ranging from $100,000 to $10 million have experienced drawdowns, suggesting potential selling or distribution by these holders.
Bitcoin Price Analysis
Currently, BTC is trading at $39,926 with mixed technical indicators. While overall rating is ‘neutral’ and moving averages indicate ‘sell,’ oscillators point towards ‘buy.’ Considering the historical data, trading sentiment, and price analysis, it is likely to expect further dips in Bitcoin’s price, which could present an opportunity for investors.
Hot Take: Brace for a Potential Bitcoin Correction
Despite the approval of a spot-Bitcoin ETF, Bitcoin’s price has not performed as expected. Technical analysis suggests a potential downturn for Bitcoin, with a significant support level at $33,000. Additionally, historical patterns indicate that previous notable events have been followed by corrections. The recent activities of cryptocurrency whales also raise concerns about the market. With these factors in mind, it is important to brace for a potential correction in Bitcoin’s price.
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