Bitcoin, the world’s largest cryptocurrency, has experienced a significant decline in price, dropping by over 17.5% after reaching a new record high of approximately $73,800. As of March 20, it has fallen to a two-week low of $60,760.
This drop in Bitcoin’s price is happening at the same time as expectations that the Federal Reserve will maintain its key interest rates within the current range of 525-550 basis points (bps). Additionally, the continued withdrawals from Bitcoin exchange-traded funds (ETFs) are putting further downward pressure on its price.
Now, let’s explore how low the price of Bitcoin could go during this ongoing correction cycle.
It is possible that Bitcoin could break below the $60,000 support level by the end of March. In particular, it 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 correction in January 2024.
The 50-day EMA also aligns with Bitcoin’s horizontal support level of approximately $59,310. When this level was tested on March 5, it preceded a 24.5% price surge.
Market analyst Rekt Capital suggests that Bitcoin’s price could 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.
Looking back at previous halvings, four years ago, Bitcoin’s price retraced by around 50% in the months leading up to the 2020 halving. This downturn 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 in 2021.
Similarly, in 2016, Bitcoin underwent a 33% pullback around the halving but recovered by the end of the year, eventually reaching a peak of $20,000 in 2017.
According to fractal analysis, Bitcoin’s ongoing price correction could eventually come to an end, followed by a bullish reversal leading to a new record high.
In terms of Fibonacci retracement levels, it is likely that Bitcoin will consolidate within the $50,000-60,000 range in the coming days or weeks. The 0.618 level, also known as the “Golden Ratio,” has historically served as a support level for Bitcoin after approaching or establishing a record high. This suggests that Bitcoin’s next support level could be around $50,000.
It is important to note that the views, thoughts, and opinions expressed in this article are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.