With Bitcoin trading close to $95k after two weeks of declining prices, analysts are wary of a potential massive crash that could see the flagship asset drop to $60k.
Bitcoin has dropped over 2.5% over the last 24 hours, with an intraday low of $95,134 yesterday. The fall in price extended its fortnight losses to 3.7%, with the asset’s market cap falling to $1.9 billion.
While bulls are striving to defend the critical $95,000 support level, on-chain data and market analysts suggest a significantly higher probability of Bitcoin’s price plummeting to $60,000 by Donald Trump’s inauguration on Jan. 19.
Following Bitcoin’s recent drop near $95,000, prominent crypto analyst Ali Martinez, who boasts over 104.3k followers, noted in a recent X post that some savvy investors have already transferred over 33,000 BTC, valued at more than $3.23 billion, from their wallets to exchanges over the past week, likely anticipating a bearish scenario.
Such a move typically occurs when investors grow cautious and prepare to sell their holdings, expecting a potential price drop or increased market volatility.
Further investor profit-taking in BTC also surged on Dec. 23, with Bitcoin holders collectively realizing over $7.17 billion in profits on that day, the analyst added.
Moreover, derivative traders appear less bullish on Bitcoin’s near-term price outlook. Notably, the percentage of traders taking long positions on the world’s largest cryptocurrency dropped from 66.73% to 53.6%.
According to Martinez, the key support level for Bitcoin lies between $93,806 and $97,041 and a failure to hold this critical demand zone could result in Bitcoin’s price correcting to $70,085.
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Failure to hold $95k may spark deeper correction
Some other crypto industry experts have similarly warned that a further decline in Bitcoin‘s price below the critical $95,000 support level could trigger a significant drop, potentially pushing it as low as $60,000.
Market commentator Tone Vays warned that if Bitcoin’s price falls below $95,000, it could signal trouble and set the stage for a sharp correction down to around $73,000.
Peter Brandt, a veteran trader who famously predicted the Bitcoin crash in 2018, has also expressed concerns that Bitcoin might be on the verge of breaking down from a “broadening triangle” — a bearish signal in technical analysis — which could result in a drop to around $70,000.
Meanwhile, Mark Newton, managing director at Fundstrat, and analyst Benjamin Cohen have both expressed concerns that Bitcoin’s price could fall to the $60,000 range in the short term.
Cohen suggests that Bitcoin’s price might follow a similar pattern to other assets, such as the Invesco QQQ Trust, potentially experiencing a crash around significant political events, such as Donald Trump’s inauguration day on Jan. 19.
The bullish case for Bitcoin
Despite the bearish outlook, some analysts remain optimistic that Bitcoin’s fall may not be as hard as many are speculating.
Georgii Verbitskii, founder of TYMIO, told crypto.news that he doesn’t anticipate any major downturns for Bitcoin in the short term. In the worst-case scenario, he expects the price might only drop to a low of $89,000, citing increased institutional activity in the market backing Bitcoin.
“Typically, there isn’t much liquidity on the market during holidays. Today is the largest expiration of options, so market makers are creating the volatility they need. In the coming days, everything will most likely stabilize and we will witness smooth growth then.”
Georgii Verbitskii, founder of TYMIO told crypto.news.
Pseudonymous trader Titan of Crypto also anticipates a similar drop in Bitcoin’s price to $87,000 during the correction phase before the next upward move toward $110,000.
Another prominent analyst observed that Bitcoin is currently completing the third Elliott Wave count, which is typically the largest wave. The analyst has set a target of $127,000 for Bitcoin.
In its latest analysis report shared on X on Dec. 27, research firm Santiment revealed an encouraging trend following the post-Christmas market-wide dip, noting that crypto whales are dominating the crypto market as they are actively moving stablecoins to exchanges.
While acknowledging that this doesn’t guarantee whales will deploy their capital immediately, the firm concluded, “Consider this a bullish sign as 2024 draws to a close.”
At press time Bitcoin (BTC) was down 2.1%, trading at $96,464 per coin.
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