Bitcoin Price Correction Expected: How Low Can BTC Go?
Bitcoin Price– Bitcoin (BTC) has seen a meteoric rise in 2024, gaining over 132%, including a significant 47% surge after Donald Trump’s election win in November. However, despite this impressive rally, market analysts are now warning that Bitcoin may be due for a sharp price correction in the near future. This prediction is supported by a fractal model comparing Bitcoin’s performance against gold, which has historically indicated a potential downturn when certain key technical levels are reached.
Bitcoin-Gold Ratio Shows Signs of Overextension
Peter Brandt, a veteran market analyst, has highlighted a critical warning signal based on Bitcoin’s performance relative to gold. According to Brandt, the Bitcoin-to-Gold ratio (BTCUSD/GC1!) has entered a key resistance zone between 34 and 37. This level has historically been associated with market tops, suggesting that Bitcoin may be overvalued compared to gold. The weekly Relative Strength Index (RSI) of the ratio has also surpassed the 70 threshold, signaling that the asset may be in overbought territory.
This pattern aligns with previous instances where Bitcoin has faced sharp price corrections after hitting similar overbought conditions. As Brandt notes, The Bitcoin-to-Gold ratio’s overbought RSI has historically been a precursor to Bitcoin price declines, particularly in the past before 2021.”
Historical Precedents for Bitcoin Price Corrections
Historically, when the Bitcoin-to-Gold ratio reaches critical resistance levels and its RSI enters overbought territory, Bitcoin tends to experience significant corrections. Brandt points to specific examples from 2017 and 2019, where Bitcoin’s price peaks coincided with overbought conditions in the ratio, triggering sharp pullbacks in BTC/USD.
For instance, during the peak of December 2017 and June 2019, the Bitcoin-to-Gold ratio reached overbought RSI levels of 70 or higher, even though the ratio itself was much lower, at around 15 and 10, respectively. These examples reinforce the idea that an overvalued Bitcoin relative to gold can trigger rebalancing among investors, leading to a reduction in Bitcoin exposure and a subsequent price pullback.
Bitcoin Price Outlook: Could BTC See a 30-35% Correction?
With the Bitcoin-to-Gold ratio signaling an overbought condition, many traders and analysts are now wondering how low Bitcoin’s price could potentially drop during this correction. Historically, Bitcoin has tested its 50-week exponential moving average (50-week EMA) after such corrections, which has served as a key support level during pullbacks.
Currently, Bitcoin is testing the 1.618 Fibonacci retracement level of around $102,000 as a key resistance point, showing signs of a potential pullback. If a correction takes place, Bitcoin could see a price range between $65,000 and $69,000, which aligns with its 50-week EMA and the 1.00 Fibonacci line. This would represent a correction of about 30-35%, with the possibility of this decline happening by March 2025.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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