Key Points
- Bitcoin's price has dropped by over 17.5% after hitting a record high of $73,800.
- The Federal Reserve's decision to maintain key interest rates and withdrawals from Bitcoin ETFs contribute to the price drop.
The value of Bitcoin (BTC) has seen a significant decrease of over 17.5%, just a week after it reached a record high of approximately $73,800. As of March 20, it hit a two-week low, settling at $60,760.
Factors Influencing the Price Drop
The decline in Bitcoin's price coincides with expectations that the Federal Reserve will keep its principal interest rates within the existing range of 525-550 basis points. Additionally, the ongoing withdrawals from Bitcoin exchange-traded funds (ETFs) are intensifying the downward pressure on its price.
There are speculations about how low Bitcoin's price can go in the current correction cycle. The ongoing correction within Bitcoin's bull market could potentially see it dip below the $60,000 mark by the end of March.
Bitcoin's Price Predictions
Bitcoin's price might fall towards its 50-day exponential moving average (50-day EMA) at around $58,780. This EMA wave support was crucial in limiting Bitcoin's bull market correction in January 2024.
The 50-day EMA also aligns with Bitcoin's horizontal support level of approximately $59,310. This level, after being tested on March 5, was followed by a 24.5% increase in price.
Market analyst Rekt Capital has forecasted that Bitcoin's price could continue its bull market correction towards $40,000. This prediction is based on Bitcoin's pre-halving price trends.
Bitcoin's price experienced a roughly 50% retracement in the months leading up to the 2020 halving, significantly worsened by the COVID-19 pandemic in March. However, it stabilized around $10,000 for the remainder of the halving year, paving the way for a bull market revival in 2021.
Similarly, Bitcoin saw a 33% pullback around the 2016 halving but recovered by the end of the year, eventually leading into a bull market in 2017 that culminated in a peak of $20,000.
If the fractal analysis is to be believed, Bitcoin's ongoing price correction could eventually be exhausted, followed by a bullish reversal to a new record high.
Fibonacci retracement levels show that Bitcoin is likely to consolidate within the $50,000-60,000 range in the forthcoming days or weeks. Historically, Bitcoin's price has frequently tested the 0.618 level as support after approaching or setting a record high. This reaffirms that Bitcoin's next support level could be around $50,000.
