The price of Bitcoin (BTC) has already reached the maximum of this cycle?

After a month marked by enthusiasm, Bitcoin (BTC) is approaching critical price levels that warn investors of a potential bear.

The world’s n°1 cryptocurrency has dropped by about 5% from the highs at 104,000 dollars and now it could reverse its short-term structure.

The fractal of the Bitcoin chart compared to gold suggests a possible 35% drop from the highs, which would coincide with the beginning of the cold bear market.

Have we truly reached the top of this market cycle, or are there still pleasant surprises awaiting us in the coming months?

Bitcoin (BTC) price down 5% from highs: is it time for a strong correction?

On December 4, 2004, the price of Bitcoin (BTC) reached a new all-time high at 104,000 dollars, sparking joy in the crypto community.

From the victory of Donald Trump in the USA elections we have witnessed an extraordinary rally, marking an increase of about 47%.

After only 7 days, however, the orange coin seems to have lost that bull momentum that characterized it throughout the month of November.

The quotations are down by 5% from the ATH at 98,190 dollars and highlight the possibility of a collapse in the coming days.

Since the beginning of the week, the bull have managed to absorb part of the downward pressure on Bitcoin, saving the crypto from a deeper fall.

However, from now on, if demand does not return to make itself felt vigorously, we may once again see the distance from the 5-digit price extend.

Two days ago, the pullback of Bitcoin’s price below $100,000 was accompanied by a massive liquidation activity on futures exchanges.

In total, over 1.5 billion dollars have been liquidated from the crypto market, with the majority belonging to long positions on BTC, ETH, and other major altcoin.

It had been since 2021 that such a heavy market cleanup had not been observed, resulting from excessive speculation and an abuse of financial leverage.

Now that the funding rate has been reset, a new leg up in the price of Bitcoin could start soon, decidedly more natural.

In any case, the market sentiment has also been reset, and the traders who exposed themselves to the crypto near the top have now changed perspective.

Bitcoin (BTC) chart in relation to that of gold suggests possible price declines

Another factor that suggests a possible drop in the price of Bitcoin is the bear fractal that has formed in the chart of the cryptocurrency compared to that of gold.

As reported by the analyst Peter Brandt, the Bitcoin-to-Gold ratio (BTCUSD/GC1!) has risen to a key resistance level between the values 34 and 37.

This area has been repeatedly identified in the past as a local top of the crypto market, from which a sharp leg down usually starts.

Furthermore, the RSI index at 14 weeks on Bitcoin has reached the overbought value at 73 points, highlighting the ample room for a bear maneuver.

In the past when Bitcoin has shown similar clues in technical analysis, it has been accompanied by a significant price drop.

For example, in March 2024, while the crypto was priced at 74,000 dollars, the Bitcoin-Gold ratio had reached the 34-37 resistance with an overbought RSI at the same time.

From there, a correction of 33% in the quotations started, which then spread to the entire crypto landscape.

A similar situation occurred in November 2021, when Bitcoin surpassed the threshold of 69,000 dollars for the first time.

In that instance, the same graphic conditions we observe today influenced the price trend of the asset for the following months.

If history were to repeat itself this time as well, we could expect a jump by March 2025 around the 50-period exponential moving average (weekly).

This would result in a 30-35% crash with a return of prices in the range of 65,000-69,000 dollars, which coincides with the Fibonacci line at 1.00.

On the other hand, a recovery of the main resistance at 102,000 dollars would open the way for a solemn pump towards 150,000 dollars.

Are we at the top of the bull market? Let’s analyze the situation from another perspective

In light of the considerations just mentioned, it is legitimate to wonder if the price of Bitcoin has really already reached the top of this bull market.

While on one hand we must reluctantly admit that a 35% drop could inexorably limit the chances of a bullish return, on the other hand we still notice the presence of a generally bullish outlook.

If we zoom out and observe the situation from another perspective, we realize that a correction would be more than healthy at this moment.

Bitcoin has risen by about 90% in just 2 months, attracting nearly 900 trillion dollars in market capitalization in a context of absolute FOMO.

It is desirable that the traders who have entered in recent months do some take profit, stabilizing the price at more “normal” values.

It is not necessarily the case, however, that the bear consolidation must inevitably lead to a dramatic collapse in prices.

Bitcoin could easily drop to around $80,000 (just below the 50-day EMA) without the bull market party being ruined.

From there, after a period of accumulation, we could likely start again aiming for new price levels with a greater push.

Some analysts expect that the true top of this bull cycle will occur even a year from now, in the fourth quarter of 2025.

If the declines of these days are scaring you, it may be due solely and exclusively to one or more of these 3 factors:

1. you are new to the crypto market
2. you are overexposed with your investment
3. you have not yet understood Bitcoin.