As the crypto bull market appears to be taking a breather, Bitcoin (BTC) has been hovering around the $101,000 to $106,000 range over the past two weeks. Interestingly, a market analyst known on X as cryptododo7 has proposed an intriguing scenario where BTC might reignite its upward trajectory. However, this plan involves an initial steep drop in its price.
The Trump Effect: Why Bitcoin Might Need to Drop to $76,000
When Donald Trump campaigned for the presidency, he garnered significant support from the digital asset community, eager for a more crypto-friendly administration. Once Trump clinched the presidency, Bitcoin surged to $108,000, only to undergo a correction dipping below $90,000. According to cryptododo7, these shifts were engineered by market makers who pushed BTC back to $108,000 as Trump took office on January 20.
The analyst suggests that these market makers used new investors buying Bitcoin at elevated prices as a way to exit. This action led to a price dip during both surges. Currently, with Bitcoin trapped in a narrow trading band, cryptododo7 believes it needs to descend to $76,000 to kickstart a fresh bullish phase.
This forecast is supported by technical patterns like the double top formation and the short-term Wyckoff Distribution Scheme, which both point to a significant price drop. Furthermore, cryptododo7 picks the $76,000 mark for several reasons, chiefly because it represents a strong support zone and a liquidity gathering point, having previously seen strong buying interest.
Additionally, if Bitcoin retraces to $76,000, the market can effectively manage the excess demand from those who entered at higher prices. This correction could open doors for institutional investors to accumulate BTC, setting the stage for the next rally. Cryptododo7 anticipates that if Bitcoin revisits $76,000 and holds firm at this level, a new bull run is likely on the horizon.
BTC Price Overview
Currently, Bitcoin is trading at $99,659, reflecting a 2.74% drop from the previous day. Meanwhile, trading volume has dipped by 31.29%, indicating waning trader interest. For Bitcoin to embark on a notable uptrend, it needs to overcome the significant resistance at $106,000, which could pave the way for new price highs. Despite fluctuations, BTC remains the top cryptocurrency, with a market cap of $1.99 trillion and a dominance of 58.6%.
Featured image from Unsplash, chart from Tradingview.
