Bitcoin’s 20% Drop: Is $50K Price On the Horizon?

Bitcoin’s price has dropped approximately 21% from its all-time high, and historical patterns suggest that it could fall even further to $50,000 in the near future. According to CoinMarketCap data, BTC fell over 12% on the weekly chart to $57,780, which is 21.6% lower than its highest point of $73,750 on March 14. This correction is the deepest retrace of this cycle, surpassing the previous retrace of 22.9% in early 2023. In fact, the current pullback is already longer than any retrace during this cycle, lasting 48 days compared to the longest retrace of 63 days.

Similar corrections have occurred during previous Bitcoin rallies. During the 2018 bull run, Bitcoin experienced five corrections of over 30% and an additional 29% correction. This history suggests that Bitcoin’s price could potentially dip to the $50,000 mark in the short term. The loss of a significant support level at $59,000, which also acted as the short-term holder realized price (STH-RP), could lead to a further decline. Jag Kooner, head of derivatives at Bitfinex, believes that if Bitcoin loses this support level, there is a high likelihood of a cascade down to the low $50,000s.

Coinglass predicts that over $750 million worth of cumulative leveraged long positions would be liquidated across all exchanges if Bitcoin falls below $60,000. The recent drop below the $60,000 mark came shortly after the debut of the first spot Bitcoin ETFs in Hong Kong. The trading volumes for these ETFs were lower than expected due to challenging macroeconomic conditions. James Wo, the founder and CEO of DFG, attributes this to a shift in market expectations, with crypto prices tumbling as the market revised its predictions for rate cuts from six to just one.

Bitcoin’s price has experienced a significant correction from its all-time high, and there is a possibility of further decline to the $50,000 mark based on historical patterns. The loss of support levels and the potential liquidation of leveraged long positions contribute to this scenario. The market conditions and macroeconomic factors also play a role in influencing Bitcoin’s price movements.