After experiencing a strong downturn in late August and early September, Bitcoin (BTC) has, in recent weeks, entered a rally that only grew in intensity shortly after the Federal Reserve lowered interest rates by 50 basis points on September 18 for the first time since 2020.
The rally has sent BTC well above $60,000 and, at one point in the early hours on Friday, above $64,000.
Bitcoin has, however, quickly entered a slight correction, but one prominent cryptocurrency expert, Ali Martinez, warned on X that investors would be wise to ‘book some profits’ by selling the cryptocurrency.
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According to Martinez, a technical analysis (TA) tool known as TD Sequential has issued a sell signal for the flagship digital asset, indicating an imminent correction for the world’s most famous coin.
TD Sequential is an analysis tool designed to gauge whether a current trend will experience a reversal by examining historical price movements.
How far could Bitcoin’s price plunge?
Another X post made by Martinez only hours earlier hints that the signaled Bitcoin downturn might not only be a brief affair but could also jeopardize long bets taken on the cryptocurrency.
At $63,493, BTC is, at press time on September 20, near its 200-day simple moving average (SMA) of $63,956 – a highly important threshold to maintain – and historical precedent shows that should it reject the price level, the coin could experience a deep pullback.
The expert, for example, presented Bitcoin’s movements in 2015, 2019, and 2020 as examples of BTC’s drop following the rejection of the SMA. If a similar scenario repeats, the cryptocurrency may decline up to 50% and go down to approximately $30,000.
Could ‘Uptober’ solidify the Bitcoin rally?
Even if Bitcoin rejects the SMA and enters a significant correction, it is possible that the psychological effects of ‘Uptober’ – October has, historically, been a particularly strong month for the price of BTC – could reignite the rally.
Indeed, the coin’s recent rally, paired with other expert and technical analysis, hints that the cryptocurrency could aim toward and beyond $70,000 in the tenth month of 2024.
For example, PlanB, a prominent analyst on X, opined on September 16 that Bitcoin is in an accumulation phase and only needs a ‘trigger’ to skyrocket.
The Bitcoin Rainbow Chart – a tool that utilizes a logarithmic growth curve and describes investor sentiment at various price levels – also estimates BTC is in an accumulation phase.
Judging by the coin’s recent performance, it is possible Bitcoin has already had its ‘trigger’ in the latest interest rate decision. Alternatively, it is safe to assume that the November Presidential Election will also serve as a catalyst for the cryptocurrency.
Still, it is worth noting that the results of the elections could determine whether BTC enters a rally or a downfall upon their conclusion.
BTC price chart
No matter what the future holds, it is safe to say that Bitcoin has entered a period of strong performance after September 7. The world’s largest cryptocurrency is 6.60% in the green in the 30-day chart and Bitcoin price today stands at $63,493.
Additionally, despite the turbulence prevalent in the crypto market in recent months, 2024 remains a strong year for the coin as it is up an impressive 49.10% up in the year-to-date (YTD) chart.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
