Bitcoin's correction anticipated to intensify, approaching a fresh all-time high
Bitcoin, the world's largest cryptocurrency, has shown a 1.5% decline over the past 24 hours, trading at $93,650 as of today. This dip comes as the digital asset approached the lower boundary of its corridor at $92,500 on December 30, according to recent data.
The decline follows the Hump Slump Bump Dump Pump pattern, a sequence of price movements suggested by technical analyst Peter Brandt, the head of Factor LLC. This pattern, while not widely recognized in mainstream technical analysis, describes a pattern of volatility and trend shifts: a "Hump" (peak), a "Slump" (decline), a "Bump" (recovery), a "Dump" (sell-off), and a "Pump" (rally).
If this pattern is indeed playing out, the current "Pump" phase could signal bullish momentum building after a period of weakness. However, traders should exercise caution as this sequence also hints at high volatility, making risk management crucial.
Peter Brandt suggests that Bitcoin's price may be completing the final stage of this model. If the pattern acts as a Head and Shoulders top, as suggested by analyst Axel Kibard, the price target for Bitcoin could be at $80,000. Notably, the 50 DMA for Bitcoin is approaching the $80,000 level.
Ki Young Ju, the founder and CEO of CryptoQuant, agrees with Brandt's analysis. Meanwhile, analysts at K33 Research predict a high probability of a bull run peak on January 17. However, QCP Capital had predicted no Bitcoin Christmas rally.
It's worth noting that the Crypto Fear & Greed Index has fallen to 65 points, its lowest level since October 15, 2024, indicating a general sense of fear among investors. Despite this, the RSI index for Bitcoin has not yet reached the oversold zone, suggesting that the market may not yet be exhausted.
Given the non-standardized nature of the Hump Slump Bump Dump Pump pattern, it's advisable to combine this analysis with other technical indicators and fundamentals before drawing conclusions. Monitoring recent expert reports or charting platforms focused on Bitcoin is recommended for the latest detailed technical analysis.
Investing in Bitcoin, given its current decline, could be a potential opportunity for those following the Hump Slump Bump Dump Pump pattern. However, considering the pattern's unpredictability and the ongoing volatility, it's crucial to exercise caution and use other technical indicators and fundamental analysis for a comprehensive investment decision.
