- Bitcoin may rise, but a significant downtrend remains feasible.
- Traders targeting $45,000 with high leverage could be liquidated.
Crypto analyst Ali Martinez posted that Bitcoin [BTC] has the potential to reach $50,000. But Martinez also noted that the rise to the milestone could have a negative aftereffect.
According to his post on X (formerly Twitter), historical data from 2016 and 2019 support this possible move.
However, he believed that BTC could face a 40% correction. This is because the coin would have reached the Fibonacci retracement level of 0.786.
In 2016 and 2019, after finding a market bottom, #BitcoinThe first major correction occurred upon reaching the Fibonacci retracement level of 0.786.
If history repeats itself, based on this pattern, $BTC could rise further towards $50,000 before a 40% correction occurs. pic.twitter.com/Gh9dDYEaQH
— Ali (@ali_charts) December 29, 2023
BTC goes back in time?
AMBCrypto observed the graph Martinez shared. According to the details, there was a 40.37% correction after Bitcoin rose above $1,000 in 2016.
A similar occurrence occurred in 2019 when BTC crossed $16,000. After that, it experienced a dip of 53.64%.
In many cases, Bitcoin has tracked historical data with its performance. So the same can happen with the price action going into the new year.
However, indications from the Liquidation HeatMap showed that it could be difficult for Bitcoin to reach $45,000.
This is because there was a cluster (in yellow) of liquidity leading to the region. If traders decide to open positions targeting $44,600 or thereabouts with high leverage, liquidation may occur.
So, it is better to be cautious as BTC may consolidate further.
Source: HyblockCapital
The image above also matched AMBCrypto’s previous articles, which projected a price drop for the coin. According to the price action, the Exponential Moving Average (EMA) showed that BTC had bullish tendencies.
This was because the 50 EMA (blue) had passed the 200 EMA (yellow).
Short-term caution
However, it is important to note that this bullish bias was long-term. So, investors who want to buy Bitcoin for a short period should lower their expectations.
For the short term, the Aroon Up (orange) showed a downward trend. The same was the case with the Aroon Down (blue) indicator. Positions like these suggest that BTC could trade sideways for the time being.
Source: TradingView
As for the on-chain condition, AMBCrypto evaluated Blancaced price via Glassnode. The Equilibrium Price is the difference between the Realized Price and the Transfer Price.
For context, the transfer price is the sum of USD coin days destroyed, adjusted for circulating supply and total time since Bitcoin’s inception.
How much are 1,10,100 BTCs worth today?
As a result, Balanced Price can identify market bottoms. At the time of writing, Bitcoin’s Balanced price amounted to $16,370. This value indicates that the coin has enormous upside potential.
Source: Glassnode
However, it may take some time for the value to increase. As it stands now, BTC could reach $50,000. But investors should be careful if there is a significant correction next, as it could provide an unprecedented buying opportunity.