Bitcoin Rally May Lose Momentum, Analysts Warn of Potential 20% Pullback

Bitget2024/03/13 23:00

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According to CoinDesk, Swissblock analysts have noted that Bitcoin's rally is showing signs of waning momentum, as indicated by a negative divergence between its price and the RSI momentum indicator. They predict that BTC could drop as much as 20% from current prices in the near term, but the uptrend will eventually resume. Over the past month, Bitcoin has been climbing to new all-time highs, with every dip being quickly bought up. However, analysts warn that the largest cryptocurrency may be entering a cool-off phase.

Swissblock stated in a note on Wednesday that Bitcoin nearly doubled in price from $38,000 in late January without any significant pullbacks, suggesting that a cooling period could be imminent. The analysts based their forecast on the negative bearish divergence between Bitcoin's price inching higher but dwindling relative strength index (RSI) on the 4-hour chart, which foreshadows lower prices. The pullback could materialize within the next few days, according to Swissblock analyst Henrik Zeberg. However, in the bigger picture, lower prices will be a temporary setback before the uptrend resumes to new highs.

Crypto investment services firm Matrixport also noted on Tuesday that Bitcoin's rally is running out of fuel and forecasted a period of consolidation. Skyrocketing meme coin prices could also signal an impending pullback, as rotating profits from large-cap cryptos to riskier tokens often marks the last stage in a crypto uptrend. Bitcoin recently traded slightly above $73,000, up 2.6% over the past 24 hours, while the broad- market CoinDesk 20 Index (CD20) advanced 4% during the same period.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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