Bitcoin’s remarkable ascent, having nearly doubled its value since late January, might be heading towards a temporary slowdown, according to insights from Swissblock analysts. Despite the cryptocurrency’s consistent new highs over recent weeks, indicators suggest a cooling-off period may be on the horizon.
Signs of Waning Momentum
Analysts at Swissblock, a leading digital asset analytics firm, have observed a notable negative divergence between Bitcoin’s price trajectory and the Relative Strength Index (RSI), a key momentum indicator. This divergence signals a possible decline in Bitcoin’s price in the near term, despite the overall upward trend.
A 20% Price Correction on the Cards
The lack of significant pullbacks since the price leap from $38,000 in late January has led Swissblock analysts to forecast a cooling-off phase, potentially resulting in a 20% price correction. According to their analysis, Bitcoin could see its value dip to between $58,000 and $59,000 shortly, marking a short-term setback before the resumption of its uptrend.
Short-Term Setback, Long-Term Gain
Despite the anticipated downturn, Swissblock remains optimistic about Bitcoin’s long-term prospects. The firm’s analysts emphasize that the upcoming price correction should be viewed as a temporary pause rather than a reversal of Bitcoin’s bullish trend.
Market Consolidation Foreseen
Echoing Swissblock’s sentiments, crypto investment service Matrixport has also pointed out the current rally’s diminishing momentum, suggesting a period of consolidation may be necessary for Bitcoin. This cooling-off phase is seen as a preparatory step for the cryptocurrency to gather strength before embarking on further rallies.
