Bitcoin (BTC) price experienced a notable correction over the past day, briefly breaking the $90,000 barrier and opening the possibility of seeking new support. After this bearish move, the digital currency achieved a slight recovery and is at $91,400 at the time of publication of this article.
This decline comes after Bitcoin reached an all-time high of over $126,000 in early October last year, representing a decline of about 25% from that peak.
Considering the current trends, Bitcoin could face further decline and seek new support at $78,000.as seen in the following graph. This level takes on technical and psychological relevance due to how digital currency prices have historically reacted around that mark.
However, this may be short-lived. Analyst Jaime Merino told CriptoNoticias that Bitcoin’s bearish move does not represent a structural change in the long-term trend.
Merino asserted that what is being observed is a correction within a larger uptrend, denying that we are in a “crypto winter.” For analysts, BTC’s decline in recent days should be interpreted as part of a natural process within the cycle of asset markets.
Arthur Hayes, co-founder of BitMEX, said that Bitcoin’s decline was due to the decline in US dollar liquidity and not to any intrinsic factors in BTC. Hayes noted that exchange-traded fund (ETF) arbitrage and inflows into BTC government bonds have declined.
Analysts predict that Bitcoin could fall in the $80,000-$85,000 range in the short term. However, he remains bullish over the medium term, predicting that Bitcoin could recover to the $200,000 to $250,000 range by the end of the year once U.S. stocks experience a correction and liquidity returns to the market.
