As Bitcoin surged and then fell again, independent market analyst Sjuul pointed out that Bitcoin’s financing rate is very high and is expected to undergo an overall adjustment. In his view, this is an opportunity to buy at a low price.
Behind the Bitcoin price correction, what is it?
Will it continue to trade sideways in the future?
Long-term upward trend
Bitcoin has been fluctuating narrowly between $51,000 and $52,500 for over a week. The second-largest cryptocurrency by market capitalization, Ethereum, has shown some strength, but after breaking through $3,000, it has dropped back to around $2,900.
In response to this, cryptocurrency trader and analyst Rekt Capital shared the following chart in a post, stating that Bitcoin has one final retracement before it resumes its upward trend.
Independent market analyst Sjuul pointed out that Bitcoin’s financing rate is very high and warned traders that an overall adjustment is expected. He stated, “In my opinion, this is the buy opportunity we are all looking for.”
Market intelligence company Santiment pointed out that significant moves by medium-sized traders often serve as excellent signals for profit-taking and buying at low prices. “In the past two weeks, stablecoin holders with $10,000 to $100,000 have increased their USDT holdings by $44.3 million,” indicating that they may be waiting for a pullback and preparing to buy at low prices.
An analyst pointed out that $53,000 is a significant resistance level for Bitcoin’s upward movement, and this rejection may indicate further consolidation below that level. This coincides with the weekly Ichimoku Cloud trend chart, which represents a key resistance zone on the long-term chart and has previously restricted the upward momentum in the second half of 2021.
Traders and market analysts believe that the repeated fluctuations are part of Bitcoin’s five-stage halving cycle, and Bitcoin may experience a retracement before halving and then enter the anticipated parabolic upward trend.
Since the launch of the Bitcoin ETF at the end of January, after a price increase of over 30%, the failed attempt to break through $53,000 may indicate further consolidation in the current range. Vetle Lunde, a senior analyst at K33 Research, stated, “The current price level is an important technical level for BTC. It coincides with the peak of the ‘Salvador’ rebound in September 2021 and the resistance level before the crash on December 4 of the same year.”
Analysts from cryptocurrency analysis company Swissblock pointed out that the stagnation of Bitcoin may indicate further retracement and potential buying opportunities.
Cryptocurrency technical analyst CryptoCon pointed out that the $53,000 region also marks the previous market cycle top of the weekly Ichimoku Cloud, a momentum and trend indicator that posed significant resistance to BTC prices in 2016 and 2019. The breakthrough in early 2017 and late 2020 cleared the way for new upward movements until reaching new all-time highs.
According to the chart released by CryptoCon, Bitcoin’s price first recovered to similar levels in the previous two bull markets, followed by a long consolidation period, and the price breakout occurred in the later stages of the Bitcoin market cycle, after the quadrennial Bitcoin halving event.
CryptoCon stated in the post, “Breaking this point will happen almost a year earlier than usual.”
Data from IntoTheBlock shows that Bitcoin traders are focusing on the next stage of the current rebound. The IOMAP model shows a strong support level for Bitcoin between $9,300 and $9,600, with 898,000 holders previously purchasing 732,000 BTC in this range. There are bullish positions of 1 million addresses around $9,800, which can be considered as a resistance level for Bitcoin to reach $10,000.00, as investors who previously purchased at this price may want to achieve breakeven.
Independent analyst Ali stated that bullish buyers are now preparing for a new “battle” to defend the support zone between $52,000 and $51,700, and the closing price above or below this zone “will determine the direction of BTC’s next move.”
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