How Low Bitcoin Price May Plunge Amid Market Correction?

Bitcoin Price: BTC, the leading cryptocurrency by market cap, witnessed a notable supply pressure on the weekend leading to an immediate reversal from its new all-time high of $73750. The bearish turnaround evidenced by three red candles plunged the asset 9.63% down to currently trade at $66777. However, market experts perceive this sell-off as a natural pullback in an established rally to regain bullish momentum.

BTC Price Sustainability Questioned by Leverage Concerns

Bitcoin Price| Tradinview

Within the last two months, Bitcoin has witnessed an aggressive rally, registering a price from $38555 to a new time high $73,750. This 91% upswing accompanied by increasing volume and massive inflow through BTC ETFs indicated a sustainable rally.

However, the analytics platform IntoTheBlock has reported a surge in crypto leverage, noting that Bitcoin’s borrowing costs on exchanges such as FBnance and Bybit have reached their highest points since 2021. This rise in borrowing rates may suggest increased trading activity where traders are taking on more debt to finance their positions, which some market participants interpret as a signal of an overheated market.

🚨 Crypto leverage hits new highs: Bitcoin’s borrowing costs on Binance & Bybit hit the highest levels since ’21. A sign of an overheated market? pic.twitter.com/VFj4OLXCyh

— IntoTheBlock (@intotheblock) March 15, 2024

Thus, the Bitcoin traders experienced a sudden selling on the weekend resulting in a price drop to $66925. With a 3.63% intraday loss, the buyers seek support at the 23.6% Fibonacci retracement level- a tool that provides traders with potential demand zones amid a correction trend.

If the supply pressure persists, the Bitcoin price may plunge to $60300 or $56200, which coincides with 38.2% and 50% FIB levels.

Historic Pullback Patterns Suggest Potential Bitcoin Correction to $45.5K

In recent crypto market observations, the pseudonymous trader known as Bags has provided a notable analysis regarding Bitcoin’s historical pullbacks coinciding with its halving events. According to Bags, Bitcoin has experienced a consistent pullback of 38% in its first two cycles. Despite the third cycle’s volatility, attributed to the COVID-19 pandemic—an outlier that the analyst suggests disregard—the same 38% pullback pattern is observed.

Amid the current market, applying the identified pullback pattern to Bitcoin’s recent peak of $73.5K, Bags calculates a correction target of $45.5K.

Technical Indicator

• Exponential Moving Average: The fast-moving 20 EMA slope provides buyers with dynamic support to prolong the recovery trend.
• Moving Average Convergence Divergence: A bearish crossover between the MACD(blue) and signal lines accentuates the sellers’ strengthening over this asset.

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