Is Bitcoin price going to crash again?
After a strong price rally in 2024, Bitcoin (BTC) is facing a major correction phase. Specifically, the BTC/USD pair is down about 13.5% from its year-to-date (and all-time) high of $74,000. .
Bitcoin's continued price decline looks like a bull market correction, allowing the market to correct and consolidate gains before moving higher again. Previous bull market corrections in the Bitcoin market have resulted in a 20-40% drop in price, creating the potential for a similar fall during the 2024 bull market.
2020-2021 Bitcoin fractal predicts 35% price crash
Bitcoin's continued price explosion has left the market in an overbought state.
In the year As of March 22, Bitcoin's weekly Relative Strength Index (RSI) stands at approximately 77. An RSI above 70 typically indicates overbought conditions, suggesting that the Bitcoin market may see a price correction as traders move to sell their holdings.
Historically, weekly RSI levels have preceded strong price corrections of more than 70 to the 50-week exponential moving average (50-week EMA, red wave). The Bitcoin chart below shows similar price declines during the 2020-2021 bull run.
In the year In 2024, Bitcoin's price path looks set for a major trend, targeting rising trend line resistance around $84,000 in April or early May.
Following this high, there is a strong possibility of a return to the 50-week EMA near $40,000, suggesting a 2020-type correction level after the peak.
In other words, BTC price has a 35% downside risk in June when measured from the price level around $64,350.
Bitcoin NUPL indicates a strong profit-minded sentiment
Additional signs of a possible Bitcoin price crash come from Net Unrealized Profit/Loss (NUPL) data.
For unadjusted: NUPL represents the difference between the market cap and the actual cap as the market cap. Thus, a NUPL reading above zero indicates that investors are taking profits and an upward trend in price indicates that many investors are taking profits.
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This level indicates an increasing reason to take profits, which leads to an increase in selling pressure. Interestingly, earlier this month, Bitcoin NUPL reached 0.64, a reading that preceded the historical profit-taking sentiment, which led to BTC's price decline.
What do Bitcoin analysts think?
Analyst Rect Capital argues that Bitcoin is in the “danger zone” following its recent price decline. This position, highlighted in red on the accompanying chart, is significant because it fits within the range that Bitcoin has historically experienced prior to the halving event.
Rekt Capital expects the price of BTC to drop to $40,000-42,000 before halving in April.
Prominent trader Axel Kibar's Bitcoin analysis is relatively bullish, predicting BTC price to stabilize around $57,500.
This downside target coincides with the uptrend of Bitcoin's previous uptrend channel.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
