Bitcoin, Ethereum Rally as Analysts Predict End of Correction

Bitcoin and Ethereum, two of the most prominent cryptocurrencies, have recently experienced significant corrections, leading to speculation about the end of their downward trends. According to a crypto analyst known as Rekt Capital, the Relative Strength Index (RSI) – a momentum indicator used to indicate overbought or oversold conditions – is flashing bullishness for Bitcoin while on the verge of breaking through a descending trendline. This suggests that Bitcoin may have reached a local market bottom and could soon rally to fill a CME gap with an upper bound price of $87,000. A CME gap is the difference between the Friday closing price of Bitcoin and the Monday opening price on the Chicago Mercantile Exchange. Traders watch for gaps as these price differences tend to get filled. Bitcoin is trading for $84,611 at time of writing, up 3.8% in the last 24 hours.

Looking at Ethereum, the analyst says ETH may be entering a significant uptrend after declining into a price support that has historically sparked rallies. Ethereum has dropped into a historical demand area. If the price can generate a strong enough reaction here, then ETH will be able to reclaim the $2,196-$3,900 macro range. If ETH does this before the March monthly close, then this entire sub-$2,200 downside would end up as a downside wick. ETH is trading for $2,048 at time of writing, up 8.9% in the last 24 hours.

According to another analyst known as behdark on the TradingView platform, Ethereum's recent pivot suggests an extended correction. This analysis is supported by the observation that Ethereum's price structure indicates a prolonged period of adjustment. Bitcoin, on the other hand, has seen a 30% correction from its all-time high, which is within historical pullback norms. This correction fits well within the patterns observed during previous bull cycles. In 2017, Bitcoin experienced multiple drawdowns, including pullbacks of 34%, 38%, 40%, and 30%. Similarly, the 2021 bull market featured a 31% pullback followed by a deeper 55% correction before concluding with a 25% drawdown. This pattern of varying correction depths throughout market cycles appears to be repeating in the current bull run.

Rekt Capital suggests that the current 30% drawdown likely corresponds to the middle-stage corrections seen in previous bull markets, rather than signaling the end of the uptrend or the final shakeout. He notes that in both 2017 and 2021, the final pullback in the bull run was quicker and shallower, enabling the final run-up to a bull market peak. This analysis suggests that Bitcoin's current correction may not be over, but it is likely to be followed by a resumption of the upward trend.

Bitcoin's recent price action has pushed the Relative Strength Index (RSI) into oversold territory, a condition that has historically preceded major bounces. Rekt Capital highlights that when Bitcoin’s RSI drops below 30, it typically signals a zone of overselling where sellers become exhausted. This pattern has accurately marked bottoms throughout Bitcoin’s history, including the 2022 bear market low. The current market structure also mirrors previous “reaccumulation ranges” seen earlier in this cycle, where prices temporarily broke below support before recovering.

For Bitcoin to confirm that the correction has ended and resume its upward trajectory, Rekt Capital identifies several technical milestones that need to be achieved. The primary objective is for BTC price to reclaim the lower boundary of its recent trading range around $93,500. This level is a key threshold that would confirm buyers have regained control of the market. The current price action shows BTC price is attempting to form a base at the bottom of its downside deviation, a process Rekt Capital describes as “clustering.” This pattern usually involves multiple weeks of price consolidation before a meaningful recovery can begin.

The overall technical setup suggests that while Bitcoin may have found its correction low, the path back to all-time highs will likely require patience. The market is currently navigating its correction phase, and traders should be prepared for continued volatility. However, the technical analysis supports short-term bearishness but indicates that Bitcoin's long-term uptrend remains intact. This suggests that the current correction is a natural part of the market cycle and that a resumption of the upward trend is likely in the near future.