Looking at this year’s price chart, Bitcoin (BTC) remains in the midst of a bullish reversal. BTC prices have risen 70% since bottoming around $16,800 in November 2022, overcoming interest rate hike concerns while benefiting from growing optimism over ETF approval.
However, in recent months, Bitcoin bulls have failed to sustain BTC prices above $30,000. So, with more than 200 days until the “long” halving, many traders are wondering: will Bitcoin price cash in again in the coming months?
Let’s take a closer look at what’s possible as Season 3 comes to a close.
Fibonacci fractals hint at Bitcoin falling to $21,500
From a technical perspective, Bitcoin price has stabilized around the 0.236 Fibonacci retracement line of the swing high (market top) of $69,000 to the swing low of $15,900 (Local market bottom).
This flat BTC price action looks very similar to what happened during the 2018 BTC price correction.
In 2018, the Bitcoin/USD pair stabilized around $6,790 around the 0.236 Fib line for several months before falling towards $3,000 in December. The $3,000 level is consistent with multi-year uptrend line support now (marked as bear market support in the chart above).
Bitcoin is now repeating the 2018 halving, with the price already flat at the 0.236 Fib line. A break above this level means BTC price will see $21,500 as the next major support level, which is a 17.75% drop from current levels.
Strong dollar increases downside risks for Bitcoin
At the same time, the U.S. Dollar Strength Index (DXY), which measures the strength of the U.S. dollar against a variety of major foreign currencies, has reached its highest level since November 2022.
The index has been negatively correlated with Bitcoin throughout 2023, as shown below.
The U.S. dollar’s gains accelerated after the Federal Reserve’s interest rate decision last week, with the U.S. Dollar Index currently drawing its 11th consecutive green weekly candle.
In other words, if the US dollar continues to climb following the DXY golden cross, Bitcoin’s upside prospects may be limited.
“Old” Bitcoins being sold?
Bitcoin’s on-chain metrics present a mixed picture.
The Bitcoin coin destruction day (CDD) indicator, which measures long-term investor behavior, spiked on September 19, indicating that some long-term BTC holders moved their coins, hinting at possible profit-taking or repositioning.
Traders should proceed with caution as most CDD surges have historically preceded price declines.
On the other hand, Bitcoin reserves across all cryptocurrency exchanges continue to decline, suggesting increased holding behavior by investors.
What Bitcoin Trading Analysts Say
Bitcoin analysts are also divided on where the price of Bitcoin will go in the coming months.
For example, popular trader Skew believes BTC prices could hit $30,000 by October, citing ask liquidity approaching $27,000, which could lead to a breakout.
Related: Bitcoin fails to recoup post-Fed losses as $20,000 BTC price regains focus
However, analyst Rekt Capital said, Not excluded Based on the pre-halving fractal shown below, the price corrected to $18,000.
Rekt Capital said: “History shows that the next 140 days will be critical for dollar cost averaging, preparing for the parabolic rebound after the halving.” He added:
“If Bitcoin were to retrace from (current price levels), it would likely happen within the current 140 days.”
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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