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Bitcoin Could Drop to $58K as Cool-Off Period Is Imminent, Swissblock Says
Bitcoin nearly doubled in price since late January, but a "counter move seems to be near," Swissblock analysts said.
Updated Mar 13, 2024, 9:29 p.m. Published Mar 13, 2024, 9:27 p.m.
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- Bitcoin's rally shows waning momentum, underscored by a negative divergence between its price and the RSI momentum indicator, Swissblock analysts noted.
- BTC could drop as much as 20% from current prices in the near term, but the uptrend will resume Swissblock forecasted.
Bitcoin has been climbing ever-higher over the past month, notching new all-time highs on the way with every dip bought up quickly, but the largest crypto may be poised for a cool-off phase, analysts warned.
Digital asset analytics firm Swissblock said in a note on Wednesday that bitcoin nearly doubled in price from $38,000 in late January without any meaningful pullbacks, and a cooling period could be imminent.
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"Nothing rallies in a straight line. Not even BTC," Swissblock analysts said in a Telegram update. "A counter move seems to be near."
Swissblock analysts based their forecast on the negative bearish divergence between bitcoin's price inching higher but dwindling relative strength index (RSI) on the 4-hour chart, foreshadowing lower prices. The RSI is a widely used momentum indicator that measures the speed and size of an asset's price changes.
The pullback could materialize as soon as in the next few days, according to a chart by Swissblock analyst Henrik Zeberg. But, in the bigger picture, lower prices will be a temporary setback before the uptrend eventually resumes to new highs.
"We see BTC dropping to $58,000-$59,000 in the next move," they said, representing a 20% decline from current prices. "But the top is not in."
Crypto investment services firm Matrixport also noted Tuesday that bitcoin's rally is running out of fuel and forecasted a period of consolidation. "This bull market still has legs, but the divergence between a declining RSI and still high bitcoin prices could signal that BTC needs to consolidate before rallying again," Matrixport analysts said.
Read more: Ether Could See Price Correction After Dencun Upgrade, QCP Capital Says
Skyrocketing meme coin prices could also signal an impending pullback, as rotating profits from large-cap cryptos to riskier tokens was often the last stage in a crypto uptrend. For example, pepe coin's breakneck rally last May presaged a 15% decline in bitcoin's price in the following month.
BTC recently changed hands slightly above $73,000, up 2.6% over the past 24 hours. The broad-market Coindesk 20 Index (CD20) advanced 4% during the same period.
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Small investors are buying bitcoin. For a rally to succeed, the whales need to join in.
Small wallets have increased their BTC holdings by 2.5% since October's all-time high while large holders trimmed 0.8%, Santiment data shows.
Cosa sapere:
- Bitcoin wallets holding less than 0.1 BTC have increased their share of supply to the highest since mid-2024 even as the price holds around the mid-$60,000s.
- Larger holders with 10 to 10,000 bitcoins — the whales and sharks that typically drive major moves — have reduced their positions since the October peak.
- The divergence supports choppy, fragile price action because retail demand alone cannot sustain rallies when big wallets are distributing into every recovery.
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