Bitcoin may reach new highs but could face a big drop, warns crypto expert Credible Crypto.
Bitcoin’s current price is $43,323, up 160% in 2023, but still 37% below its 2021 all-time high.

Renowned pseudonymous crypto analyst Credible Crypto, who has a substantial following on social media platform X, has shared his insights on Bitcoin’s current trajectory. He notes that there have been three or four instances in the history of Bitcoin of sharp drops that followed parabolic gains. The observations made by Credible Crypto emphasize the idea that market activities frequently elicit equal and opposite responses.

“For every action, there is an equal and opposite reaction.”

This applies to markets too.

If you think we are going to have a parabolic rally to 100k+ in a relatively short period of time then you must accept that there will be an equally aggressive correction that follows.…

— CrediBULL Crypto (@CredibleCrypto) December 27, 2023

Credible Crypto claims that excessive excitement and greed drive parabolic rallies in the market. These emotional elements frequently precede devastating market crashes. In the world of cryptocurrency, this tension between euphoria and misery is a common occurrence.

At the time of writing, Bitcoin is trading at $41,973. While it has seen impressive gains in the early months of 2023, it remains over 37% below its previous all-time high, achieved in November 2021. This serves as a reminder that, despite recent progress, there is still ground to cover before reaching uncharted territory.

Bitcoin (BTC) enthusiasts have reason to be optimistic as the world’s leading cryptocurrency embarks on a path that could lead to a new all-time high. Traders and analysts carefully monitor Bitcoin’s recent success; some are even projecting major price milestones. Notwithstanding the positive sentiment, analysts caution against the possibility of an “aggressive correction” that might come after any parabolic surge.

Analyzing Bitcoin’s Price Trends

A bullish trend with higher highs and higher lows has been observed in recent weeks while analyzing the daily chart of Bitcoin. Nevertheless, the price has stabilized above $40,000, suggesting the rally has paused. Within the cryptocurrency world, there is conjecture that a more profound decline could be approaching, pushing the price down to $38,000 or even closer to the 200-day moving average, which is around $32,000.

Even with the gloomy forecast, Bitcoin is still showing indications of strength. According to the relative strength index (RSI), the bullish momentum remains. Because of this, some analysts believe that before a major drop may start, Bitcoin should aim for the crucial $48,000 resistance level.

Despite a 3% decline in price over the past week, there is still evidence of significant coin accumulation. This is determined by examining changes in the price of Bitcoin on a weekly chart. Despite brief price swings, investors seem unfazed and are still buying Bitcoin.

Analyzing Bitcoin NUPL

Another valuable metric to consider is the net unrealized profit/loss (NUPL) metric, which gauges all market participants’ unrealized profits or losses. The data indicates that many investors are currently holding Bitcoin at a profit, a positive sign typically associated with a bull market.

However, it is worth noting that NUPL has already entered a range comparable to the last all-time high. This could potentially trigger profit realization among investors, leading to an increased supply and, consequently, downward price pressure. This observation raises questions about the timing of potential investments, as a correction may be on the horizon.

 

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Filed under: Bitcoin - @ December 31, 2023 10:45 pm