Bitcoin’s price has experienced a significant drop of over 17.5% after reaching a new all-time high of approximately $73,800. Currently, as of March 20, it has hit a two-week low of $60,760.
This decline in Bitcoin’s price coincides with expectations that the Federal Reserve will maintain its key interest rates within the existing range of 525-550 basis points (bps). Additionally, the ongoing withdrawals from Bitcoin exchange-traded funds (ETFs) are further contributing to the downward pressure on its price.
Now, let’s explore how low the Bitcoin price can potentially go during this correction cycle.
It is possible that Bitcoin’s current correction within its bull market could cause it to dip below the $60,000 mark by the end of March. Notably, BTC could decline towards its 50-day exponential moving average (50-day EMA) at around $58,780. This EMA support played a crucial role in limiting Bitcoin’s bull market correction in January 2024.
The 50-day Exponential Moving Average (EMA) aligns with Bitcoin’s horizontal support level of approximately $59,310. This level has been tested before on March 5 and preceded a 24.5% price surge.
According to market analyst Rekt Capital, Bitcoin’s price could potentially continue its correction towards $40,000. This pessimistic forecast is based on Bitcoin’s pre-halving price trends. The analyst compared the current price correction to the patterns observed before the last two halvings and identified that Bitcoin is now in a “Danger Zone,” potentially leading to an extended correction towards its ascending trendline support near $40,000.
Four years ago, Bitcoin experienced a roughly 50% retracement leading up to the 2020 halving, which was further intensified by the COVID-19 pandemic in March. However, it stabilized around $10,000 for the rest of the halving year, setting the stage for a bull market revival in 2021.
Similarly, Bitcoin underwent a 33% pullback around the 2016 halving but recovered by the end of the year, eventually entering a bull market in 2017 that culminated in a peak of $20,000.
Based on the fractal analysis, Bitcoin’s ongoing price correction could eventually come to an end, followed by a bullish reversal towards a new all-time high.
Furthermore, Fibonacci retracement levels suggest that Bitcoin is likely to consolidate within the range of $50,000-60,000 in the coming days or weeks.
It’s worth noting that Bitcoin’s price has historically tested the 0.618 Fibonacci retracement level as support after reaching or establishing a new record high. This is evident in the chart above, indicating that Bitcoin’s next support level could be around $50,000.
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