The price of the flagship cryptocurrency Bitcoin (BTC) has fallen by more than 5% over the past week to now trade at around $56,500 after trading above the $64,000 late last month. A technical indicator, however, is now suggesting it can keep on dropping.
According to popular cryptocurrency analyst Ali Martinez, Bitcoin’s 2-month chart shows that its Stochastic Relative Strength Index (RSI) has signaled a “trend reversal from bullish to bearish.”
Per the cryptocurrency analyst over the past 10 years, data shows that this trend reversal has “preceded a significant correction of around 75.5%.”
An important observation on the #Bitcoin 2-month chart: the Stochastic RSI has just signaled a trend reversal from bullish to bearish. Historically, in the past 10 years, this has preceded a significant correction of around 75.50%! pic.twitter.com/YxlwMFxTEl
— Ali (@ali_charts) September 3, 2024
A notable example of this pattern occurred in 2022 when Bitcoin was also trading above $60,000 and hit a then new all-time high above the $69,000 level. Following a bearish RSI signal, the cryptocurrency plummeted to a cycle low of approximately $16,000 before it started recovering.
If the current bearish trend persists, Bitcoin could face a dramatic decline. A 75% correction from its current trading level could potentially send the coin down to around $14,200. It’s worth noting, however, Bitcoin’s price dropped below $16,000 during the last bear market over the collapse of then-major cryptocurrency trading platform FTX.
Notably, popular pseudonymous crypto analyst “Mikybull Crypto” recently shared insights on Bitcoin, explaining some technical indicators and predicting a potential massive price surge to $130,000 per coin.´
On top of that, Benjamin Cowen, a prominent cryptocurrency analyst, has revealed that Ethereum’s monthly candles have been tracking its performance in 2016 “perfectly,” which suggests that if the trend continues Ethereum could end September in the green and drop later in the year, before surging in 2025.
Ethereum surging would likely be closely linked to a Bitcoin price rise, as the assets have historically seen significant correlation.
Featured image via Unsplash.