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Bitcoin (BTC) ended the week above the $100,000 mark for the first time in history, capping off a massive week for the cryptocurrency with another milestone. However, market watchers warned investors that historical patterns could soon lead to a major correction in the flagship cryptocurrency.
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Bitcoin's first weekly closing price exceeds $100,000
Bitcoin broke through the $100,000 milestone almost a week ago, breaking through a psychological barrier for the first time. After this feat, the largest cryptocurrency by market capitalization faced its biggest setback since Trump's victory in the US presidential election.
BTC at one point fell about 13% and reached the $90,000 level on a candlestick similar to its performance when it first hit the $10,000 barrier. Since then, the cryptocurrency has been hovering between the princely range of $97,000 to $101,000, facing some resistance to break out of the upper zone of this range.
As reported by NewsBTC, crypto analyst Jere believes that BTC will follow the same trajectory after the $10,000 milestone, as it did in November 2017, and the new surpassed level will be reached in three days. He pointed out that there is a possibility that the company will turn to support.
Bitcoin hit its first daily close above $100,000 on Sunday after wandering in a new range for four days. This performance also marked the first weekly close above this barrier, showing similar weekly performance to the $10,000 candlestick.
Crypto analyst Recto Capital highlighted that BTC’s daily close was above this mark and that Monday’s 2.5% decline was technically a “retest” of this level. However, the ongoing retest is very volatile and at the same time has been trying to turn the “last major daily resistance” near the $98,000 zone into support for the past two days.
Bitcoin is trying to turn the $98,000 level into support. Source: Rekt Capital
The analyst added: “Such unstable retesting makes sense, especially on a weekly basis.” He explained that the $98,000 level was broken as resistance on the weekly chart after yesterday's close, so “this week is all about trying to reclaim that level as new support.”
Will the next few weeks be “problematic” for BTC?
Despite breaking through a key barrier, Rekt Capital warned investors about next week when BTC will enter a “parabolic uptrend” post-halving. The analyst previously explained that after each halving, Bitcoin enters a parabolic period that lasts about 300 days each cycle.
Historically, BTC price records its first significant decline a month after entering price discovery mode. According to analysts, the first “price discovery correction” historically begins between weeks 6 and 8 of each parabolic phase and sees a return of at least 25%.
BTC enters week 6 of parabolic phase. Source: Rekt Capital
Rekt Capital noted that today marks the beginning of the sixth week of the post-halving rally, highlighting that this is a time frame in which BTC prices have significantly reversed. Based on this, the price of Bitcoin could plummet by 25% to 40% in the coming weeks, similar to what it did in 2017.
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The analyst warned investors that a retest of the current $98,000 level will be key, and failure to maintain this level could trigger the first major correction.
As a result, over the next three weeks or so, I'm going to be increasingly cautious about retesting attempts, and given BTC's history at this point in the cycle, even if major levels become invalid. I wouldn't be surprised.
Nevertheless, he stated that “a second price discovery uptrend will occur after the price discovery correction,” which could lead to BTC reaching a new ATH.
At the time of this writing, Bitcoin is trading at $98,073, down 2% in the past 24 hours.
Bitcoin performance on weekly charts. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com
