Skip to content

Caution: Why Bitcoin is facing a 50% drop soon

Caution: Why Bitcoin is facing a 50% drop soon
Paul L.

As Bitcoin (BTC) rallies to new highs in the ongoing explosive post-election rally, a critical historical metric hints at a possible near-term correction for the leading digital asset.

In this case, crypto analyst Ali Martinez has offered a cautionary note, stating that retail interest may be fueling a dangerous overvaluation, he said in an X post on November 12.

To illustrate his concern, Martinez pointed to the surging Google search trends for ‘Bitcoin,’ which often coincide with price corrections. This pattern was seen in 2021 when increased public interest led to corrections of 30%, 26%, 27%, and even 50%.

With Bitcoin nearing the $90,000 mark, search interest is again spiking. Martinez warned that while heightened interest brings in new capital, it often signals a market top. 

“Not bearish, just a word of caution. While retail interest in Bitcoin signals further capital inflows, spikes in search trends often align with price drops,” Martinez said. 

Bitcoin price analysis chart. Source: TradingView/Ali_charts

More Bitcoin pullback concerns

At the same time, crypto trading analyst Michaël van de Poppe also supported the possibility of a near-term Bitcoin correction in a November 12 post on X. Poppe noted that, with Bitcoin around $90,000, there remains room for a possible pullback.

Despite the impressive rally, he suggested that attention should be paid to a potential 10% correction toward the CME gap before further gains. As he described, this “sweet spot” correction could provide a healthier foundation for Bitcoin’s next upward push.

He also warned that the upcoming U.S. Consumer Price Index (CPI) report could stoke bearish sentiment toward the asset.

Bitcoin price analysis chart. Source: TradingView

In line with the price outlook, as reported by Finbold, trading expert Alan Santana pointed out that Bitcoin has confirmed its bullish bias. 

He stated that the momentum is likely sustainable if Bitcoin trades above the $65,000 and $69,000 levels. The focus remains on the $100,000 target, which looks achievable in the current cycle if the bullish elements remain at play. 

Indeed, Bitcoin’s rally has seen it target the $90,000 resistance level, inspired by optimism surrounding Donald Trump’s re-election. 

Given Trump’s possible influence on digital assets, market players such as BitMEX co-founder and former CEO Arthur Hayes see Bitcoin potentially reaching a $1 million valuation.

“It took $4 trillion to decrease the debt-to-nominal GDP ratio from 132% to 115%. Let’s say the US reduces it further to 70%, which is where the ratio was in September 2008. Just using a linear extrapolation equates to $10.5 trillion of credit that must be created to accomplish this deleveraging. This is how Bitcoin goes to $1 million because prices are set on the margin,” Hayes said

Bitcoin price analysis 

Bitcoin was trading at $85,505 at press time, rallying over 4% in the last 24 hours. On the weekly chart, BTC has surged by over 25%.

Bitcoin seven-day price chart. Source: Finbold

As things stand, Bitcoin is looking to maintain momentum and target the $90,000 mark, provided it stays above the $85,000 support zone. However, concerns about a possible correction cannot be ignored, considering that momentum indicators such as the relative strength index are overbought.

Featured image via Shutterstock 

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Services

IMPORTANT NOTICE

Finbold is a news and information website. This Site may contain sponsored content, advertisements, and third-party materials, for which Finbold expressly disclaims any liability.

RISK WARNING: Cryptocurrencies are high-risk investments and you should not expect to be protected if something goes wrong. Don’t invest unless you’re prepared to lose all the money you invest. (Click here to learn more about cryptocurrency risks.)

By accessing this Site, you acknowledge that you understand these risks and that Finbold bears no responsibility for any losses, damages, or consequences resulting from your use of the Site or reliance on its content. Click here to learn more.