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Bitcoin: A Worrying Technical Correction!

Fri 10 May 2024 ▪ 4 min of reading ▪ by Mikaia A.
Getting informed Event

Hong Kong’s spot Bitcoin and Ethereum ETFs disappoint, observers express dismay. No surprise as Bitcoin continues to struggle to climb back up, losing about 4% at the start of the week. One question remains: how low can the price of Bitcoin go?

Hand pushing a bitcoin coin into the mud

Bitcoin Downtrend: How Low Will It Go?

Despite hopes of a bull run after the halving, Bitcoin is slow to take off, undermining the optimistic projections of Robert Kiyosaki, author of “Rich Dad Poor Dad,” and his financial circles, who were betting on Bitcoin reaching 100,000 or even a million dollars in the near future. It seems that a revision of these forecasts is necessary.

Bitcoin’s price is in freefall! The current correction follows a descending wedge pattern, with two trend lines converging towards a peak estimated at about 54,000 dollars. According to analysts, Bitcoin could fall to this level by June if the current trend continues.

daily-price-bitcoin
Bitcoin Daily Price Chart – Source: TradingView

The target of the descending wedge is around 63,880 dollars, representing an increase of about 3.5% from current price levels. In other words, each dip could offer a buying opportunity.

However, some forecasters are less optimistic. Peter Brandt, an experienced trader, believes that Bitcoin’s price could dive towards the 40,000 to 50,000 dollar range. According to him, Bitcoin has failed to surpass its previous highs despite the halving and ETFs. He even predicts a dive into the “early 40s” followed by a recovery.

Brandt bases his prediction on a descending triangle that developed after Bitcoin failed to reclaim its previous record of 69,000 dollars. He warns that if Bitcoin breaks the lower trend line of the triangle, it could fall to 48,550 dollars, a drop of over 20% from current price levels.

The 2021 Fractal Indicates More Pain Ahead

From a technical perspective, the recent correction in Bitcoin’s price is accompanied by a drop in the weekly Relative Strength Index (RSI), which exited its overbought zone. This move has brought the RSI below a several-months’ ascending trend line, reminiscent of the trend before a steep price correction in 2021.

In 2021, BTC had dropped towards its 50-week EMA (the red wave), suggesting the possibility of a repeat of the same pattern in 2024. Therefore, the BTC downside target is around 46,110 dollars by June, the level corresponding to the 0.618 Fibonacci retracement line.

A significant break below the 50-week EMA could send the price towards the 200-week EMA, around 32,410 dollars, a drop of about 58% from current price levels.

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Mikaia A. avatar
Mikaia A.

La révolution blockchain et crypto est en marche ! Et le jour où les impacts se feront ressentir sur l’économie la plus vulnérable de ce Monde, contre toute espérance, je dirai que j’y étais pour quelque chose

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.