The king of cryptos continues the bullish rally in February, ending the month up 23%. However, a new wave of correction could arise in bitcoin (BTC). Here’s why…
The same movement is reproduced?
The cryptocurrency market has been on a bull run since the start of the year. With this, the total crypto market cap has fallen from $840 billion in December 2022, to $1.16 trillion currently. For the queen of cryptos, she has recovered almost 67% of her value, since January until the time of this writing. However, a correction is possible for bitcoin (BTC). Indeed, it seems that the same movement at the beginning of the year is repeated on its chart.
On this daily chart, we see that the correction from February 21 to March 10 occurs after three phases. This is a bullish rally phase, followed by the creation of a “small dip”, and finally the creation of a new high. After that, it can be seen that bitcoin (BTC) suffered a decline of more than 22% before bouncing back to $28,000. This correction drove the price towards the 61.8% fib level ($19,904) of the bullish rally to the new high.
Especially since this level lines up with the $20,000 support. After bouncing off this psychological zone, bitcoin (BTC) started an explosive 48% rally, setting a new high around $29,146. If the same scenario happens again, we can expect a correction towards $23,255, a drop of 15% from the current price.
When to take a short position in bitcoin (BTC)?
The RSI divergence on the daily scale reinforces the bearish thesis from earlier. If this bearish scenario is confirmed, it seems like a good time to short bitcoin (BTC). In this case, the 50% level of the weekend range could be an interesting entry point.
If the price breaks through the psychological support of $29,000, we can envisage a new bullish impulse above $30,000. Which is quite likely if the banking turbulence persists.
Admission: $28,350;
Stop: $29,000;
Goal: $23,200.
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