Bitcoin Caution: Analysts Predict 30-40% Pullback

Top cryptocurrency analysts forecast a potential 30-40% decline in Bitcoin's price, citing technical indicators and diminishing demand as catalysts. Bitcoin has breached critical support levels, with a potential free fall if current levels fail to hold. The Relative Strength Index (RSI) has failed to reach oversold territory, indicating a lack of buy-in from investors and signaling further declines. The broader time frame also indicates a bearish trend, with lower time frames showing oversold conditions, suggesting potential short-term relief but a bleak long-term outlook.

Bitcoin Faces Potential 30-40% Correction as Analysts Signal Caution

Lucknow, India (May 1, 2024): Prominent cryptocurrency analysts have issued a stark warning, predicting a potential 30-40% decline in the price of Bitcoin (BTC) during the current market cycle. As BTC struggles to maintain its footing around $55,000, experts cite technical indicators and fading demand as catalysts for a precipitous drop.

Technical Indicators Point to Weakness

Analyst Scott Melker has highlighted the significance of Bitcoin breaching critical support levels, which have now become resistance zones. He cautions that there is a void of support until around $52,000, indicating a potential free fall if current levels falter.

Melker also expresses concern over the Relative Strength Index (RSI), which has yet to dip into oversold territory. Typically, an oversold RSI is viewed as a potential reversal point where prices could rebound. However, Bitcoin's RSI avoiding these lows suggests a lack of strong buying interest, signaling potential further declines.

The chart shared by Melker illustrates a distinct downward trend in Bitcoin prices following a period of consolidation. This pattern exhibits a series of lower highs and lower lows—a classic bearish signal. The analysis suggests that while the market has witnessed a 23% correction already, it remains relatively mild compared to historical corrections during bull markets, which have seen dips as deep as 30-40%.

Diminished Demand and Whale Activity

Crypto analyst Ali Martinez has observed a noticeable decline in Bitcoin whale activity since mid-March, indicating waning confidence among significant investors, who are typically known to buy the dips.

Julio Moreno, Head of Research at CryptoQuant, has also noted a slowdown in demand for Bitcoin, particularly evident in the tepid response to Spot Bitcoin ETFs this month. This suggests that the market may be entering a period of reduced enthusiasm.

Potential Bottom at $47,000

Analyst DonAlt has outlined a scenario where Bitcoin could plunge as low as $47,000. He believes that the $60,000 price point will likely face repeated tests, and if breached, BTC could see its value tumble to $52,000 and potentially lower to $47,000. DonAlt suggests that such a price breakdown is necessary for the long-term continuation of Bitcoin's bull run.

Conclusion

While Bitcoin has experienced a period of consolidation and attempted a rally, leading analysts remain cautious, forecasting a potential 30-40% correction. Technical indicators such as breaking support levels and a lack of oversold RSI readings point to weakness. Diminished whale activity and tepid demand further suggest a cooling market sentiment. Investors are advised to exercise caution and consider potential downside risks before making investment decisions.