Bitcoin prices are volatile, recently falling from a peak of over $73,000 in March to current spot levels. Analysts are turning to historical data for insights as selling pressure mounts and some investors worry about potential near-term losses. This historical analysis is crucial in determining whether we have reached the market top or if this is just a temporary pause before the trend resumes.
Will the depth of this correction depend on this?
In a post on X, an analyst he said The depth of the current correction will largely depend on whether Bitcoin is “parabolic” or not. Whenever an asset registers “parabolic” prices, it means that the valuation has increased sharply and, at some level, analysts think it is unsustainable.
In this case, prices tend to cool down later, but after the main resistance levels and even all-time highs have been broken. If this is the case, then the current cooling could suggest the formation of a potential “first cycle top” at the March 2024 all-time high of $73,800.
This formation will be similar to those observed in April 2013 and 2021.
However, in another scenario, traders should expect a different deal, assuming that recent price growth has not been unsustainable or parabolic. Assuming this is the case, Bitcoin will likely continue to bleed and revisit established support levels.
The analyst predicts a possible correction to the $53,600 support in the coming sessions. Tits retraction, continues the analyst, will allow the formation of a “smoother curve like 2016 – 2017”.
The Influence of Bitcoin Halving
In addition to this assessment, another analyst is embracing the concept of Bitcoin’s pre-halving cycle. Normally, and looking at historical formations, prices tend to collapse leading to reduce by half event, which is scheduled for the third week of April.
In a post on X, the analyst he said the current rejection and failure of bulls to push prices higher suggests the coin could consolidate between $60,000 and $70,000 in the coming weeks.
Bitcoin remains under pressure and will likely record even more losses in the coming days. Based on the formation of the daily chart, BTC prices are trending below the average BB. Notably, it is encountering strong rejection at the $71,700 zone.
Although the upward trend continues, buyers will only have control if prices rise, reversing current losses, preferably with increasing participation levels.
DALLE Featured Image, Chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC’s opinion on buying, selling or holding any investments and, naturally, investing carries risks. We advise that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.