Bitcoin price came face to face with liquidity at $53,000 on Tuesday. This move triggered a sell-off resulting in a deeper dive below $52,000 — a level that became important to traders late last week.
The leading cryptocurrency barely holds above $51,000 during US business hours on Wednesday, maintaining a 2.2% drop in 24 hours. A daily candle close below $52,000 could shift the compass south, with traders likely to look at $50,000 and $48,000 as the next potential support areas.
Is Bitcoin Price Going To $500k
Bitcoin has made significant strides in the past few months, thanks to the positive outlook for the US Bitcoin ETF.
This sparked a stunning surge in Q4, pushing BTC to surpass $42,000 by the end of the year. The transition of Grayscale’s Bitcoin Trust to the GBTC ETF increased the market fluctuations, but the surge in interest among institutional investors has boosted Bitcoin’s performance.
As a result, Bitcoin rose from under $39,000 in January to over $53,000 in February.
The bullish outlook in BTC is expected to continue with the halving due in April. Halving reduces the supply of BTC in the market by slashing miner rewards in half.
For instance, this upcoming halving will cut rewards from 6.25 to 3.125 BTC, subsequently shrinking supply while demand rises. The expected high-risk appetite for the ETF is expected to contract supply further, thus positioning Bitcoin price for a humongous bull run.
Michaël van de Poppe, the founder and CEO of MN Trading Consultancy predicts that Bitcoin has the potential of “reaching $500k.” With Bitcoin hovering below $51,000, a rally of this magnitude could be a game changer even for altcoins in the market.
However, Poppe advises investors to be vigilant despite the long-term bullish sentiment, as “corrections will happen and they’ll be rough.”
Investors have been asked to capitalize on the corrections, “if Bitcoin corrects by 20% or more.” These will be rare opportunities to buy dips, positioning for future trends.
The overly bullish sentiment is great for #Bitcoin.
Long-term, a likelihood of Bitcoin reaching $500K is definitely there.
However, corrections will happen and they’ll be rough.
If Bitcoin corrects by 20% or more, use those as a giant buying opportunity.
That’s it.
— Michaël van de Poppe (@CryptoMichNL) February 21, 2024
The four-hour chart shows that traders would be looking for acceptance above the 50-day Exponential Moving Average (EMA) (the red line) as well as the ability to stay in the rectangle to validate a rebound above $52,000 in this and upcoming sessions.
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Indicators like the Moving Average Convergence Divergence (MACD) reinforce a bearish sentiment, which if taken seriously by sellers, may ignite a bigger correction below $50,000.
Although investors are likely to ‘eat up’ the dips quickly, it would be prudent to plan a dollar-cost average strategy, allowing them to buy at various price levels to $48,000. This is another area of concern for Bitcoin likely to provide immense liquidity to support a stronger rebound into the pre-halving rally.
Traders will also be looking for acceptance above the $53,000 resistance. A successful retest of this level would imply a stronger uptrend targeting areas above $54,000. Despite the correction below $51,000, Bitcoin affirms the potential to peak between $58,000 and $60,000 before halving.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/markets/bitcoin-price-could-hit-500k-but-dont-fear-the-corrections/
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