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Since Donald Trump’s election victory on November 5, Bitcoin (BTC) has seen a notable rally, reaching record highs above $108,000. However, this momentum has recently faltered, with the cryptocurrency falling below the critical $100,000 mark,
This has prompted analysts to speculate about a potential deeper correction with some experts believing that Bitcoin could fall to levels around $85,000 or even $75,000 before resuming its upward trajectory.
Is this a temporary setback or the calm before a final surge?
Morecryptoonl analyst highlights that current market dynamics suggest a substantial probability that Bitcoin will move towards $85,000. This projection comes from the observation that the recent wave of price action has not had the strength typical of uptrends, failing to reach key extension levels.
The “overlapping and corrective nature” of the rally highlighted by the analyst further supports the idea that a significant pullback could be imminent. If this scenario comes to fruition, it could represent the last major correction of the current bull market, setting the stage for a final price surge.
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Technical analyst Rekt Capital offers a mixed perspective, stating that the perception of Bitcoin at $75,000 as a favorable entry point is relative to its current price of around $97,000.
Rekt Capital also suggests that what looks like a bargain now may not have looked so attractive when Bitcoin was previously at that level.
Despite the bearish sentiment of some experts, others see the recent price correction as significant purchasing opportunity. Analyst VirtualBacon says the market’s reaction to Bitcoin’s fall from $108,000 to $96,000 was “overblown.”
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VirtualBacon he states that this decline is not indicative of a market collapse but rather a healthy phase of consolidation within an ongoing bull market.
Historical data supports this view, as corrections of this nature often precede new highs. Key support levels, such as the 21-week exponential moving average (EMA) near $79,000 and the 200 daily EMA near $73,000, remain intact, suggesting that even a brief decline to these levels would not destabilize the overall bullish structure.
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According to VirtualBacon, underlying economic conditions also play a crucial role in shaping the future of Bitcoin. Recent actions by the Federal Reserve (Fed), including a modest rate cut and a cautious approach to monetary policy, suggest a stable economic environment.
As the Fed continues its policy of quantitative tightening (QT), the expectation is that this will not persist indefinitely. The growing US debt crisis is likely to require a return to the situation quantitative easing (QE), which has historically fueled bullish trends in cryptocurrency markets.
In summary, the recent decline in the price of Bitcoin is seen by many as a temporary setback rather than the end of the bull market. As long as Bitcoin maintains its position above critical support levels, the uptrend remains intact.
At the time of writing, BTC is trading at $97,720, down 3% in the 24 hours and more than 2% for the week.
Featured image from DALL-E, chart from TradingView.com