A cryptocurrency analyst has warned that Bitcoin’s (BTC) technical setup is signaling a possible correction toward the $50,000 mark as the asset struggles to push to $65,000.
The analyst, RLinda, noted that Bitcoin is undergoing a significant correction following a recent impulse, with little sign of a major upward movement in the short term, as mentioned in a TradingView post on October 7.
According to RLinda, Bitcoin experienced a false breakout near the $64,955 mark, which she identified as a critical resistance point. In outlining the roadmap for Bitcoin’s potential drop, the expert emphasized that the double-top formation near this resistance strongly indicates a possible downward move.
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Bitcoin’s recent dip below the $62,342 mark has led the asset into a “panic zone” where sellers took control and initiated a downward push. The analyst suggested that the market may see a retest of this zone, as the price could briefly rise to challenge sellers who entered earlier. However, any rebound is likely to be short-lived.
RLinda pointed out the importance of the $60,000 level, where an imbalance exists, making it a key area for a potential retest. This level also serves as the lower bound of a larger liquidation zone that could see the price drop as selling pressure increases.
Bitcoin key price levels to watch
Looking ahead, RLinda is focusing on several key support levels that could come into play as Bitcoin’s correction deepens. Potential targets are $57,736, $55,000, and ultimately $52,000, which the analyst believes is the final destination for this leg of the correction.
Indeed, Alan Martinez also observed the possibility of Bitcoin dropping to $52,000, noting that the cryptocurrency is in a descending parallel channel, signaling further losses ahead.
At the moment, Bitcoin is attempting to hold its price above the $62,000 level, with most market players maintaining that there remains bullish momentum for the asset in the long term. For instance, an analysis by CryptoCon in an X post on October 8 stated that historical data indicates the leading cryptocurrency is performing well.
The expert acknowledged that Bitcoin’s price movement in 2024 seems to be taking longer than expected to reach new all-time highs. However, a look at historical cycles shows that Bitcoin’s performance is ahead of schedule compared to previous cycles.
On October 8, 2012, 2016, and 2020, Bitcoin was still significantly far from its record high. For example, in 2016, Bitcoin didn’t reach a new high until March of the following year, and similarly, in 2012, it took months to reach fresh highs.
Yet, on October 8, 2024, Bitcoin sits just inches from its record high. Therefore, the expert noted that the market just needs time, and as shown in prior cycles, patience may soon reward those waiting for the next significant price surge.
Is Bitcoin facing major volatility ahead?
Despite the long-term bullish sentiments around Bitcoin, the chances of the asset correcting in the near term have been elevated, considering that the U.S. government could sell the $4.33 billion seized from the Silk Road marketplace.
This possibility arose after the U.S. Supreme Court declined to hear Battle Born Investments’ appeal over the ownership of 69,370 Bitcoin on October 7, 2024. The court’s ruling cleared the way for the government to sell the seized funds, which have been untouched for four years.
The decision follows two months after the U.S. government moved 29,800 BTC ($2.02 billion), of which 10,000 BTC ($594 million) were transferred to Coinbase Prime. Indeed, if the government proceeds with the sale, it could trigger short-term volatility and panic selling among investors.
Bitcoin price analysis
At press time, Bitcoin was trading at $62,197 with daily losses of over 2%. On the weekly chart, Bitcoin is up 0.15%.
In conclusion, while Bitcoin’s long-term outlook remains bullish, short-term technical indicators and external factors suggest the possibility of further corrections. Therefore, investors may need to brace for short-term volatility while maintaining patience for a potential rebound.
