Key Insights
- Bitcoin recently shed around 21% of its value in a mere three days.
- This crash has led to widespread panic of further drops, with the 50-day EMA showing that a retest of $70,000 is still possible.
- The ETF market lost around $1 billion as investors offloaded their positions.
- The Wyckoff reaccumulation model shows that a rebound towards $96,000 could be underway.
- Bitcoin has a fair chance of hitting the $100,000 zone, even though experts like Standard Chartered’s Geoff Kendrick predict possible downturns.
- Investors should brace for the unexpected, as Bitcoin’s future remains to be seen.
Bitcoin recently entered a correction phase and shed around 21% of its value in a matter of three days.
The market is currently attempting to navigate this downturn, and analysts are stuck in debates about whether or not Bitcoin will see a rebound towards the ultimate $100,000 mark.
Here are all the key factors driving Bitcoin’s price trajectory and what to expect from the flagship cryptocurrency between the next few days and the coming weeks.
Bitcoin’s Correction—How Far Will It Go?
Bitcoin’s crash was a harsh one. The cryptocurrency hit a record high of around $109,300 in January, amid calls for a bull market from investors across the market.
However, soon after reaching this price level, Bitcoin had crashed to a monthly low of around $87,534 by late February.
This brutal crash triggered concerns about further declines, with some analysis seeing support levels around the $76,000 zone and others suggesting that Bitcoin had hit a local bottom somewhere around $82,115.
One of the most widely followed patterns, called the Wyckoff re-accumulation model, shows that Bitcoin might indeed have hit a market bottom and could be preparing for a move to the upside.
According to independent market analyst SuperBro, Bitcoin has entered what is known as the “test phase,” where it could be testing support around $95,950 and attempting to perform a liquidity sweep around the $85,950 zone.
In essence, if this level holds, the next logical step for Bitcoin would be a rally towards the $96,780 price level.
In essence, Bitcoin could be on its way to hitting the $100,000 zone soon.
Interestingly, Bitcoin’s current performance has played out several times in the past, during several cycles.
Bitcoin crashed just as it did in August of last year, losing a harsher 30% of its value as it crashed from $70,000 to $48,000.
However, the cryptocurrency eventually broke out of this range and exploded to the upside.
The cryptocurrency gained another 56% in its breakout from the $70,000 zone and rally towards $109,000 around the time of Donald Trump’s victory.
ETF Withdrawals and Market Uncertainty
The cryptocurrency’s decline was especially scary for investors, considering how it came alongside massive outflows from the U.S. spot Bitcoin ETFs.
Farside Investors data shows that traders pulled out nearly $1 billion from the market during the sell-off, especially as the panic spread.
On the technical front, Bitcoin has its 50-week EMA (red line) around $76,390. Historically speaking, when Bitcoin corrects its trajectory from local tops, it tends to hit this price level as observed in March 2024 and in November 2021.
In the event that Bitcoin (unfortunately) breaks below, the resulting sell-off could lead to a crash towards $57,690 or even $48,170.
However, a bounce between $85,000 and $90,000 could fuel another push toward $100,000.
Will the Fed Play a Role?
The broader economic factors are also adding to the uncertainty. For example, the Federal Reserve has just paused its rate-cutting cycle after an initial half-point reduction in September.
This move, which was based on “renewed inflationary concerns,” could work hand-in-hand with the Trump-proposed tariffs on Canada and Mexico to fuel fears of an incoming trade war.
If this happens, the correction just might continue.
On the flip side, another key metric, called the Bitcoin Market-Value-to-Realized-Value, or MVRV, shows that the cryptocurrency has yet to peak for this cycle.
According to Assure DeFi CEO and analyst Chapo in a recent X post, Bitcoin will likely register an MVRV of 3.2 before topping out.
In essence, Bitcoin could push further up again and test this $100,000 mark indeed.
Interestingly, the $109,000 January high happened when Bitcoin’s MVRV reached 2.44.
The same has happened in previous cycles, where similar spikes marked the final leg of a bull run before the bear market began.
At the time of writing, the MVRV sits at 1.95 and could be an indicator of further gains for Bitcoin.
Finally…
The crypto fear and greed index currently sits at around 20/100, which is a ‘fear” reading.
This trend indicates that “paper-handed” investors have been shaken out of the market, and Bitcoin could be set for a reversal.
However, the Bitcoin indicators continue to show mixed signals.
While some, like the 50-day EMA trend, point towards a correction to the bottom side, historical signs and the MVRV show that a recovery is inbound.
If Bitcoin successfully holds support around $85,000-$90,000, a push towards $100,000 could be in the works.
However, the drop towards the 50-week EMA remains a valid threat.
The cryptocurrency’s future will depend strongly on other factors like macroeconomic conditions, ETF flows, investor sentiment, and more.
Whether or not Bitcoin returns to climbing upwards remains to be seen in the coming months.
