After a strong rally in 2024, Bitcoin is in a critical correction period against the US dollar. Notably, Bitcoin has fallen approximately 13.5% against the U.S. dollar since its high point so far this year of nearly $74,000.
This decline appears to be a normal correction in a bull market, providing an opportunity for the market to consolidate and consolidate before potentially rising again in the future. Bitcoin price corrections have resulted in declines of 20%-40% during previous bull cycles, heightening the likelihood of similar declines during the 2024 bull market.
During 2020-2021, Bitcoin’s price pattern predicts a massive 35% decline. The continued price rise has left the Bitcoin market severely overbought.
As of March 22, Bitcoin’s weekly relative strength index (RSI) was around 77. RSI values above 70 generally indicate that the market is overbought, which means Bitcoin may undergo a price correction as traders may sell their holdings. Historically, when the weekly RSI level exceeds 70, prices typically make sharp corrections toward the 50-week exponential moving average.
Going into 2024, Bitcoin’s price trajectory appears to be on an uptrend, targeting uptrend line resistance around $84,000 in early April or early May. After reaching this potential high, prices may retrace to the 50-week moving average around $40,000, signaling a correction similar to that seen in 2020. In other words, from the current price level of around $64,000, the price of Bitcoin could fall by 35% by June.
Data on Bitcoin’s Net Unrealized Profit and Loss (NUPL) hints at strong profit-taking sentiment. NUPL is the difference between market capitalization and realized market capitalization divided by market capitalization. A NUPL reading above zero indicates that investors are making profits, while an increasing trend in this value means that more and more investors are starting to make profits. When the reasons for profit increase, the pressure to sell will increase.
Bitcoin’s NUPL reached 0.64 earlier this month, a reading that has historically been a precursor to increased profit-taking and a sharp decline in Bitcoin prices.
Veteran market analyst Ray Cote believes that Bitcoin has entered a "danger zone" after its recent price decline. He predicted that the price of Bitcoin will adjust to the range of $40,000-42,000 before the halving event in April. $BTC #热门话题 #BNBChain
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