- Recent weak performance in Bitcoin correlates with subdued launches of Bitcoin and Ethereum ETFs in Hong Kong and Fed’s persistent high-interest rates.
- Technical analysis suggests Bitcoin could drop as low as $54,000 during its current correction phase, aligning with a falling wedge pattern.
- Veteran trader Peter Brandt forecasts a potential descent into the $40,000 to $50,000 range, citing a descending triangle pattern.
Bitcoin’s recent price decline has coincided with several significant financial events, including a lukewarm reception to the debut of spot Bitcoin and Ethereum ETFs in Hong Kong, a continued high-interest rate policy from the U.S. Federal Reserve, and reduced inflows into spot Bitcoin ETFs in the United States. These factors collectively contribute to the downward trajectory observed in the cryptocurrency market.
Technical Outlook and Market Sentiments
The technical analysis indicates that Bitcoin is currently trading within a falling wedge pattern, characterized by converging downward-sloping trendlines. This pattern suggests a potential decline to around $54,000 by June if the current consolidation persists. The convergence point of this wedge near the 200-day exponential moving average (EMA) provides a dual-layer of technical support, possibly setting the stage for a market rebound.
Further analysis projects a rebound target for Bitcoin at approximately $63,880, which would represent a 3.5% increase from its current levels. This scenario aligns with typical outcomes for falling wedge patterns, where the price eventually breaks above the upper trendline.
Veteran Trader’s Perspective
Adding to the market analysis, veteran trader Peter Brandt anticipates that Bitcoin might dip into the high $40,000 range. Brandt identifies a descending triangle pattern on Bitcoin’s chart, which traditionally signals a bearish reversal. This pattern points to a possible drop to as low as $48,550, a scenario that could unfold if the lower trendline of the triangle is decisively breached.
Historical Context and Future Projections
Reflecting on Bitcoin’s historical data, the current price movement is somewhat reminiscent of the 2021 market conditions, where a sharp correction followed a break in the weekly relative strength index (RSI) from its overbought territory. If this pattern repeats, Bitcoin could potentially fall to around $46,110 by June, matching its 0.618 Fibonacci retracement line.
A critical break below the 50-week EMA could precipitate a more severe downturn, with potential targets near the 200-week EMA at approximately $32,410, marking a significant 58% decline from current levels.
