Early on May 1, Bitcoin (BTC) faced another correction that caused the price to drop below the $60,000 support level. The flagship cryptocurrency has seen several retraces during this bull cycle, with BTC quickly reclaiming crucial support zones each time.
However, over the past 24 hours, the largest cryptocurrency by market capitalization has struggled to regain momentum. Some analysts believe that Bitcoin could be at the bottom of this cycle, as this correction has officially become its deepest retracement.
Is the bottom of Bitcoin there?
In the early hours of Tuesday, Bitcoin began to dive in the $64,000 price range. As the day progressed, BTC extended its fall to briefly trade between $59,958 and $59,191 before recovering.
This time, the recovery did not last long as the price of Bitcoin resumed its downward trajectory to $57,000. In an X thread, crypto trader Milkybull examined some data suggests the bottom may finally be reached.
According to the analyst, BTC “follows the AP of 2017”. This would suggest that “the bottom is either in or it's close.” Additionally, he urged investors to remember that while good news “usually signals a top,” bad news signals a bottom in a bull market.
In the thread, the trader pointed out that the Bitcoin Bull Market Support Band indicator historically provides important support during BTC bull cycles. Consequently, he considers that the flagship cryptocurrency could “pass through the support and bounce back”.
2024's Bitcoin Bull Market Support Band indicator resembling 2017's. Source: MilkybullCrypto on X
According to the analyst, Bitcoin and global liquidity are also highly correlated, with BTC currently at a level from which it has already rebounded. These rebounds triggered “huge rallies in the crypto market” in October 2022 and October 2023.
Finally, the thread highlighted that Bitcoin “is at a critical decision point for the local bottom.” The trader considers that although some are calling for a bottom of $48,000, the support level of $51,000 could be the point where BTC rebounds to resume its cycle towards the top of this cycle.
Bitcoin’s deepest retracement this cycle
According to crypto analyst and trader Rekt Capital, this correction is officially the deepest BTC retracement of this cycle. According to jobtoday's -23.64% retracement exceeds the -22.91% retracement seen in February 2023.
The analyst also compared the “post-halving” decline of this cycle to that of 2016. Additionally, the trader believes that this bull cycle could be more similar to that of 2016 than investors think.
We are here (orange circle)
And we've seen post-halving pullbacks like this in the past (e.g. in 2016).$BTC #Bitcoin #BitcoinHalving pic.twitter.com/OvOcmJTzFk
– Rekt Capital (@rektcapital) May 1, 2024
Previously, Rekt Capital listed three reasons why these two cycles could be similar. According to the trader, the resemblances include “distribution of re-accumulation range before halving”, “beginning of retrace before halving”, and “similar initial reaction after start of retrace before halving”.
After today's retrace, the analyst added the “continued decline in the three weeks following the halving” as the fourth similarity between the 2016 and 2024 cycles. Like eight years ago, Bitcoin faces “additional downside below the low range of its reaccumulation fork” within three weeks of Bitcoin’s “halving.”
Additionally, the analyst suggests that the current price action is “no surprise” as it reflects the “post-halving danger zone” of 2016.
At the time of writing, the flagship cryptocurrency is trading at $57,794.89. This correction represents a drop of 6.2% over the last 24 hours. Likewise, BTC records price drops of 13.4% and 17.7% on the weekly and monthly time frames.
Bitcoin's price performance in the weekly chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com
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