After a month marked by enthusiasm, Bitcoin (BTC) is approaching a critical price level that warns investors of a potential bear.
The world’s No. 1 cryptocurrency is down about 5% from a high of $104,000 and may now change its near-term structure.
The fractal chart of Bitcoin versus gold suggests a possible 35% drop from the highs, which would coincide with the start of a cold bear market.
Have we truly reached the top of this market cycle or are there more pleasant surprises in store for us in the coming months?
Summary
Bitcoin (BTC) Price Down 5% From Highs: Is It Time for a Strong Correction?
December 4, 2004 Bitcoin price (BTC) reached a new all-time high of $104,000, causing joy in the crypto community.
Since Donald Trump’s victory in the US elections, we have witnessed extraordinary growth, marking an increase of approximately 47%.
However, after just 7 days, the orange coin appears to have lost the bullish momentum that characterized it throughout November.
Quotes decreased by 5% compared to ATN at $98,190 and highlight the possibility of a collapse in the coming days.
Since the beginning of the week, bulls have managed to absorb some of the downward pressure on Bitcoin, saving the cryptocurrency from a deeper fall.
However, from here on out, if demand doesn’t come back and make itself known, we could see the distance from the 5-digit price increase again.
Two days ago, Bitcoin’s price pullback below $100,000 was accompanied by a fall in Bitcoin’s price. mass liquidation activity on futures exchanges.
In total, more than $1.5 billion was liquidated from the cryptocurrency market, most of which was long positions in BTC, ETH, and other major altcoins.
Such a large-scale market clearing has not been observed since 2021.as a result of excessive speculation and abuse of financial leverage.
Now that the funding rate has been reset, Bitcoin’s price could soon begin to rise again, which is clearly more natural.
In any case, market sentiment has also changed and traders who had exposed themselves to crypto near the top have now changed their minds.
Bitcoin (BTC) chart versus gold chart suggests possible price decline
Another factor indicating a possible fall in the price of Bitcoin is a bearish fractal formed on the cryptocurrency chart compared to the gold chart.
The Bitcoin to Gold ratio (BTCUSD/GC1!) has risen to a key resistance level between 34 and 37, analyst Peter Brandt said.
This area has been recognized as the local top of the crypto market on multiple occasions in the past.from which a sharp downward jerk usually begins.
Additionally, Bitcoin’s 14-week RSI reached an overbought reading of 73 points, highlighting ample bearish room.
In the past, when Bitcoin showed similar clues in technical analysis, it was accompanied by significant price drops.
For example, in March 2024, when the cryptocurrency price was $74,000, the Bitcoin-Gold ratio reached resistance of 34-37 with the RSI overbought at the same time.
From here, a 33% correction in quotes began, which then spread to the entire crypto landscape.
A similar situation occurred in November 2021 when Bitcoin crossed the $69,000 threshold for the first time.
In this case, the same graphical conditions we see today influenced the asset’s price trend in the following months.
If history were to repeat itself this time, we could expect a jump around the 50-period exponential moving average (weekly) by March 2025.
This will lead to Crash 30-35% with prices returning in the $65,000-$69,000 range.which coincides with the Fibonacci line at 1.00.
On the upside, a retracement of major resistance at $102,000 would pave the way for a ceremonial pump to $150,000.
Are we at the top of a bull market? Let’s analyze the situation from the other side
In light of the considerations just mentioned, it is not unreasonable to wonder whether the Bitcoin price has actually already reached the top of this bull market.
While on the one hand we must begrudgingly admit that a 35% drop could inexorably limit the chances of a bullish comeback, on the other hand we still note that there is an overall bullish outlook.
If we zoom out and look at the situation from a different perspective, we realize that a correction at this point would be more than healthy.
Bitcoin is up roughly 90% in just 2 months, attracting nearly $900 trillion in market capitalization amid absolute FOMO.
It is advisable for traders who entered in recent months to take some take profit, stabilizing the price at a higher level.normal“values.
However, it is not necessarily the case that a bearish consolidation will inevitably lead to a sharp fall in prices.
Bitcoin could easily fall to around $80,000 (just below the 50-day EMA) without disrupting the bull market.
From here, after a period of accumulation, we could likely begin to aim for new price levels again with a stronger push.
Some analysts expect the real top of this bull cycle to occur even a year from now, in the fourth quarter of 2025.
If the recession is scaring you these days, it may be due solely to one or more of these three factors:
- you are new to the crypto market
- you overestimate your investment
- you haven’t understood Bitcoin yet.
