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LUCKNOW (CoinChapter.com) — Top cryptocurrency analysts are sounding alarms over a potential 30-40% drop in Bitcoin’s price during the current market cycle. As the cryptocurrency struggles to maintain its momentum around $55,000, experts cite concerning technical indicators and diminishing demand as potential catalysts for a steep decline.
BTC/USD daily price chart. Source: TradingView Breaking Support Levels and Lack of Buying Momentum
Analyst Scott Melker highlighted Bitcoin’s breach of critical support levels, which have now turned into resistance zones. He warned that there is “nothing but air” until around $52,000, indicating a potential free fall if current levels fail to hold.
Additionally, Melker expressed concerns over the Relative Strength Index (RSI), which has failed to dip into oversold territory.
$BTC DailyBroke and retested range lows as resistance. Nothing but air until around $52,000 on the chart.My biggest concern I have been discussing for months (in newsletter) is that RSI never made the trip to oversold. Almost there now, all lower time frames oversold.This… pic.twitter.com/5YZTWipBo8
— The Wolf Of All Streets (@scottmelker) May 1, 2024
Typically, an oversold RSI is seen as a potential reversal point where prices could bounce back. However, Bitcoin’s RSI avoiding these lows suggests a lack of strong buy-in from investors, signaling potential further declines.
The chart shared by Melker shows a significant downward trend in Bitcoin prices following a period of consolidation. This pattern shows a series of lower highs and lower lows—a classic bearish signal. The analysis indicates that while the market has seen a 23% correction already, this is relatively mild compared to historical corrections during bull markets, which have seen dips as deep as 30-40%.
Melker’s analysis also touches upon the broader time frames. He mentioned that lower time frames are now showing oversold conditions. It means that short-term relief might be on the horizon. However, the larger picture remains bleak.
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Potential Bottom at $47,000 Before Resuming Bull Run
Earlier, another prominent analyst, DonAlt, outlined a scenario where Bitcoin could plunge as low as $47,000.
According to DonAlt, the $60,000 price point is likely to be tested repeatedly, and if it fails, Bitcoin could see its price tumble to $52,000 and potentially even lower to $47,000. He suggests that such a price breakdown is necessary for the continuation of Bitcoin’s long-term bull run.
Source: X
Denis Baca, Head of Product at Zivoe Finance, also pointed out that Bitcoin historically retests the support level of the 20-week SMA in May. His predictions align with the other analysts, forecasting a potential drop to $56,000.
Diminishing Whale Activity and Tepid Demand
Crypto analyst Ali Martinez observed a noticeable dip in Bitcoin whale activity since mid-March, indicating diminishing confidence among significant investors known to buy the dips.
Since March 14, there's been a noticeable dip in #Bitcoin whale activity. A surge in whale transactions could be the spark needed to boost $BTC prices! pic.twitter.com/hd6fwpp9Gp
— Ali (@ali_charts) April 27, 2024
Julio Moreno, Head of Research at CryptoQuant, also noted the slowdown in demand for Bitcoin, particularly evident in the tepid interest in Spot Bitcoin ETFs this month, suggesting that the market may be entering a cooler phase.
The post Bitcoin May Drop 30-40% in The Current Cycle: Top Analysts appeared first on CoinChapter.
