The world of cryptocurrency has witnessed a groundbreaking event as Bitcoin (BTC) closed the week above the $100,000 mark for the first time in its history. This remarkable achievement has captivated investors and enthusiasts worldwide. However, some market analysts are urging caution, highlighting potential historical patterns that could lead to a significant market correction.
Bitcoin’s First Weekly Close Above $100,000
Bitcoin’s journey to surpass the $100,000 milestone has been nothing short of phenomenal. Nearly a week ago, BTC broke through this psychological barrier, marking an extraordinary feat for the largest cryptocurrency by market capitalization. Nevertheless, the crypto market is known for its volatility, and Bitcoin soon experienced a notable retrace, reminiscent of its performance during the US presidential elections when Trump secured victory.
After briefly dipping around 13% to the $90,000 level, Bitcoin has managed to stabilize, hovering between the $97,000 and $101,000 price range. Despite this stabilization, the cryptocurrency faces resistance in breaking past the upper zone of this range. As reported by NewsBTC, crypto analyst Jelle noted that Bitcoin might follow a similar trajectory as its post-$10,000 milestone, turning the newly crossed level into support after a few days, akin to its behavior in November 2017.
Bitcoin’s recent performance culminated in its first daily close above $100,000 on a Sunday, mirroring its weekly performance when it first reached the $10,000 milestone. Crypto analyst Rekt Capital emphasized that BTC’s daily close above this mark, coupled with a 2.5% pullback on Monday, constitutes a “technical retest” of this level. Despite the volatility, Bitcoin has simultaneously attempted to convert the “final major daily resistance,” around the $98,000 zone, into support over the past two days.
Potential Challenges Ahead: Will the Next Few Weeks Be ‘Problematic’ for BTC?
While Bitcoin’s breach of the $100,000 barrier is a significant achievement, Rekt Capital has cautioned investors about the upcoming phase in BTC’s post-halving “Parabolic Upside Phase.” The analyst previously explained that Bitcoin tends to enter a parabolic period lasting approximately 300 days each cycle following every Halving event.
Historically, Bitcoin’s price undergoes its first major pullback about a month after entering price discovery mode. According to the analyst, this “Price Discovery Correction” typically occurs between Weeks 6 and 8 of each parabolic phase, resulting in retracements of at least 25%.
Currently, BTC is entering the sixth week of its Parabolic phase, a period historically marked by significant price retracements. Based on this pattern, Bitcoin’s price could potentially nosedive by 25% to 40% in the coming weeks, similar to what occurred in 2017.
The analyst highlighted the significance of the ongoing retest of the $98,000 level. Failure to maintain this support level could trigger the first major correction. Consequently, investors are advised to exercise caution over the next few weeks, as key levels might be invalidated, given Bitcoin’s historical behavior at this stage of the cycle.
Nevertheless, the analyst remains optimistic, stating that “the Second Price Discovery Uptrend will take place after the Price Discovery Correction,” potentially propelling Bitcoin to a new all-time high (ATH).
As of the time of writing, Bitcoin is trading at $98,073, reflecting a 2% drop in the past 24 hours.
