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- Bitcoin’s 30% pullback is typical in uptrends, reflecting similar corrections seen in 2017 and 2021.
- The RSI is oversold, indicating potential for a price reversal and a possible rally.
- On-chain data from CryptoQuant CEO Ki Young Ju signals a potential bear market, with whales selling at lower prices.
Bitcoin has experienced several pullbacks this cycle, most recently a significant 30% drop.
While this might seem alarming, analyst Rekt Capital points out that it’s actually quite typical when looking at previous market cycles.
How Does This Correction Compare to Past Bull Runs?
Looking back at Bitcoin’s history, this correction mirrors the initial price discovery pullbacks seen in 2017 and 2021. The current 30% drop is similar to the 31% pullback in 2021 and the 34% drop in 2017.
According to the analyst, these kinds of corrections are normal during an uptrend and don’t necessarily signal a major problem. As Bitcoin’s market cycle progresses, pullbacks can become more severe, but they are often followed by quick recoveries and new all-time highs. The similar depth of these corrections also suggests a potential turning point, much like in past cycles.
Related: Bitcoin Traders in Wait-and-See Mode Ahead of Fed Rate News
What Does an Oversold RSI Mean for Bitcoin?
The analyst also noted that Bitcoin is currently in an oversold condition, with the Relative Strength Index (RSI) falling below 30.
This often indicates that sellers are exhausted, and buyers might start stepping in, pushing prices upward. In previous cycles, whenever Bitcoin became oversold, it saw reversals and the start of new uptrends. So, if history repeats itself, the market could be on the verge of another rally.
Is There a Bearish Counterview?
However, CryptoQuant CEO Ki Young Ju believes that on-chain data suggests the Bitcoin bull market has ended, and prices might remain flat or even decline for the next 6 to 12 months. He argues that as new money entering the market dries up, large holders (whales) are selling Bitcoin at lower prices.
He wrote, “Every on-chain metric signals a bear market. With fresh liquidity drying up, new whales are selling Bitcoin at lower prices.”
Bitcoin’s Price
Bitcoin’s price is currently in a range-bound pattern, within a defined range, showing no clear direction. The key resistance levels between $83,700 and $85,300 are still holding firm, and there’s no strong indication of either a significant drop or a breakout. Price movements in both directions appear to be corrective, and support is holding steady.
Related: Crypto Investors Hit the Exit Button: $6.4 Billion Leaves Digital Assets
The market remains undecided. For any short-term bullish movement, Bitcoin needs to break above $85,300, while a bearish scenario would require a drop below $81,150.
The market is waiting for clearer signals, which could emerge after the upcoming interest rate decision and FOMC meeting.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
