Bitcoin’s price has experienced a significant decline of over 17.5% following its recent record high of approximately $73,800. As of March 20th, it has reached a two-week low of $60,760.
This drop 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 price of Bitcoin could potentially go during this correction cycle.
It is possible that Bitcoin could break below the support level of $60,000 by the end of March. In particular, it may decline towards its 50-day exponential moving average (50-day EMA), which is currently around $58,780. This EMA wave support played a crucial role in limiting Bitcoin’s bull market correction in January 2024.
Furthermore, the 50-day Exponential Moving Average (EMA) aligns with Bitcoin’s horizontal support level of approximately $59,310. This support level was tested on March 5th and preceded a 24.5% surge in price.
Market analyst Rekt Capital suggests that Bitcoin’s price could potentially continue its correction towards $40,000. This pessimistic forecast is based on Bitcoin’s pre-halving price trends. By analyzing fractal patterns, Bitcoin is currently in a “Danger Zone” and could experience an extended correction towards its ascending trendline support near $40,000.
Four years ago, Bitcoin underwent a roughly 50% retracement in the months 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 experienced a 33% pullback around the 2016 halving but recovered by the end of the year, eventually reaching a peak of $20,000 in the following bull market of 2017.
Based on fractal analysis, it is possible that Bitcoin’s ongoing price correction will eventually exhaust itself, leading to a bullish reversal and a new record high.
In terms of Fibonacci retracement levels, Bitcoin is likely to consolidate within the range of $50,000 to $60,000 in the coming days or weeks. The weekly chart shows that Bitcoin has frequently tested the 0.618 level, also known as the “Golden Ratio,” as support after reaching or establishing a record high. This suggests that Bitcoin’s next support level could be around $50,000.
Please note that the views, thoughts, and opinions expressed in this article are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.