Is the bull run over for bitcoin or are new maximum prices coming?


Key facts:
  • In bull markets, corrections are common and healthy.

  • The bullish factors that have driven the price of bitcoin are still present.

After several consecutive days setting new all-time high prices and having reached above $73,000, bitcoin (BTC) has its first considerable drop.

At the time of this publication, each BTC trades for $67,800 on major exchanges. In the following graph, provided by TradingView, you can see the price of BTC in the last week:

Bitcoin price with 4 hour candles. Source: TradingView.

Does this mean that the bullish cycle is over? Is crypto winter coming back? First of all, it is important to clarify that, in financial markets, corrections (bearish movements within a bullish macrotrend) are common and even healthy.

A bearish correction can help prevent the formation of speculative bubbles. When asset prices rise too quickly, the risk of a subsequent sharp decline increases. The bearish corrections They help moderate this rise and keep prices more aligned with the fundamental values ​​perceived by the market.

Additionally, a correction can be a sign that the market is rebalancing. It indicates that assets that were overbought—as various indicators reported by CriptoNoticias showed for bitcoin for several weeks—are returning to more reasonable prices.

And, from the point of view of market psychology, corrections can help moderate excess optimism or euphoria in the market. This creates a more balanced environment and less prone to impulsive investment decisions based on fear or greed.

Note that, at the time of this publication, even with the fall that bitcoin has had, the fear and greed index that evaluates various parameters in the bitcoin market, continues to mark “greed” values:

Fear and Greed Index, updated 3/15/2024. Source: Look Into Bitcoin

Having said all this, it must be considered that the fundamental factors that have driven the price of bitcoin and have taken it to its all-time high prices above $73,000, remain intact. Nothing has changed.

The spot bitcoin ETFs approved in January in the United States continue to exert significant selling pressure. They are buying more bitcoins than are issued daily.

Besides, The proximity of the halving – scheduled for April 2024 – drives the trend of bitcoin accumulation. Historically this has been a bullish catalyst for its price and it is known that history, although with slight variations, tends to repeat itself.

Thirdly, as CriptoNoticias showed days ago, there are several indications that not only large institutional investors are interested in bitcoin, but also small investors are arriving (or returning, perhaps) retailers.

For all this, bullish expectations for bitcoin remain valid. According to the projections of various analysts, BTC could even exceed $100,000 per unit this year. Some, seeking greater precision, say that this would occur close to the halving (that is, in just over a month).

Taking all this into account, and assuming that these bullish expectations are correct, it can be considered that Every drop is an opportunity to buy “cheap” bitcoin. In this way, following strategies such as DCA, entry prices can be averaged.

Where will the price of bitcoin go next?

Although in the medium and long term, the upward trend seems inevitable, in the short term high volatility can be expected. According to an analysis by Nodecharts, having lost the $69,000 mark, bitcoin could fall to the $64,000 or $65,000 range.

And, according to the theory of supports and resistances, if bitcoin fell from those prices, it would find a next barrier in the area of ​​​​60,000 or 61,000 dollars.

In any case, it can also be anticipated that – for the reasons explained above – this correction should not extend too long over time. Maybe it’s just a matter of hours or a few days. As some people say traders, bitcoin would simply be gaining momentum to rise strongly again.

Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of CriptoNoticias.

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