Analysis points to the possibility of a massive correction for BTC
Bitcoin is moved away from chasing a long fix repeatedly this year. Bitcoin’s rise to $ 58,367 in February drew modest selling pressure as the price plunged 26.30 percent in the sequence. Likewise, its previous rally above a sharp $ 41,000 high was followed with a 30% bearish correction.
Last week, Bitcoin reached a new high above $ 61,778, followed by a 13.87% correction. But again, the cryptocurrency found broad bullish support near local lows, raising hopes that it would continue its rise for the rest of the first quarter.
Comparing two bullish races of Bitcoin on the weekly cryptocurrency charts. Source: BTCUSD at TradingView.com
Bitcoin’s Next Decline
Bitcoin has maintained support above WMA-20 since it closed above it in late April 2020. Its last contact with the support wave was in October 2020 – again coinciding with the RSI approaching 51.92. Since then, BTC / USD has largely avoided retesting.
Part of the reason is the growth of Bitcoin as a conventional financial asset. Each of the cryptocurrency’s fall corrections followed with a major company announcing support for it – whether offering crypto-enabled services (read PayPal, MasterCard) or adding Bitcoin to balance sheets as an alternative store of valuable assets (Tesla, MicroStrategy, etc. ).
Loose monetary policies and ultra-low interest rates have provided advantages for Bitcoin adoption among traditional companies. With most of these bulish measures still in place, the bulls expect the cryptocurrency to grow further later this year. Some even think that a Bitcoin costing $ 100,000 is possible.
As usual, WMA-20 is rising in parallel as Bitcoin extends its weekly uptrend. On Thursday, the green wave was close to $ 37,825.
Meanwhile, the RSI is within its overbought area, hoping to fall further as the market neutralizes. The fractal sees a drop to 51.92, which means that it would largely coincide with the BTC / USD’s fall towards the WMA-20.
This risks putting the pair on track for at least $ 40,000.