Bitcoin Faces Potential Correction as Traders Warn of 40% Drop

Bitcoin's price has been hovering just below $105,000 following a robust multi-month rally, but prominent traders are now issuing warnings about a potential correction. According to Crypto Seth and CryptoPatel, technical indicators suggest that a downturn might be imminent. One analyst even predicts a possible decline to as low as $60,000 if crucial support levels fail to hold.

On a popular social media platform, Crypto Seth shared a chart from CryptoCapo, which indicates that Bitcoin's price has been rejected from the $108,000 to $111,000 range. This range aligns with the 2024 all-time high, and the price pattern resembles a rounded top, a formation that typically signals waning momentum. A critical level to watch is $93,000. If Bitcoin's price falls below this point, the chart suggests a potential sharp decline to around $73,800, with further drops possible into the $60,000 to $65,000 zone. This range is significant as it corresponds with the April 2021 all-time high near $64,899 and the November 2021 breakout zone around $69,000. According to CryptoCapo, if Bitcoin breaks through these support levels, these areas could attract new buyers.

Market analyst CryptoPatel has also identified a bearish divergence on the five-day chart of BTC/USDT. While the price is making higher highs, the Relative Strength Index (RSI) is making lower highs. This divergence often signals decreasing buying momentum and increases the likelihood of a trend reversal. Patel draws a parallel to a similar pattern observed around the $16,000 level in late 2022, when a bullish divergence on the RSI preceded a significant upward move toward $112,000. Currently, Patel sees a reverse setup forming at the highs, suggesting a potential top and a corrective move ahead.

Bitcoin's price continues to respect its larger uptrend from the 2023 lows. Key support levels include $63,000 from late 2024 and $42,000 from earlier consolidation periods. Analysts agree that if momentum continues to weaken, these zones may be tested. Both charts underscore the importance of price structure over market sentiment, as traders await confirmation of a larger shift. Tweets from Crypto Seth and others reflect a mix of surprise and caution, as more traders recognize the technical setup that could trigger a pullback for Bitcoin's price.