Bitcoin Faces 78% Drop Risk as Price Fluctuates Between $61,000 and $104,000

Bitcoin is currently at a critical juncture, with prices fluctuating between $61,000 and $104,000 over the past seven months. This price range bears a striking resemblance to the previous sideways movement between $31,000 and $64,000, which preceded a sharp decline in early 2022. The market is divided on whether this pattern will repeat or if new demand will sustain Bitcoin's value.

According to analysis, Bitcoin’s recent price movement from $61,000 to $104,000 mirrors the 2020–2021 “distribution zone” when it traded between $31,000 and $64,000 for nearly a year. During that period, Bitcoin peaked around $69,000 in November 2021, only to plummet to roughly $15,600 by November 2022, marking a nearly 78% drop.

Michaël van de Poppe noted that Bitcoin attempted to surpass the $106,000 level this month but was swiftly rejected, leading to long-side liquidations. The price subsequently retreated to the $104,000–$105,000 range. Each failed breakout is seen as a warning sign of distribution, raising concerns among traders.

Veteran trader Peter Brandt highlighted that strong fundamentals often precede market tops. He suggested that if the current setup leads to a similar 78% drop from the $105,000 band, Bitcoin could fall toward $23,600, mirroring the previous cycle's decline from around $69,000 to $15,500.

Despite growing demand from spot ETFs and institutional and governmental investments, technical barriers persist. The inability to clear the $105,000 mark has made some analysts cautious, even as investment flows into Bitcoin reach unprecedented levels.

Trader Tardigrade observed that Bitcoin’s 50-day and 200-day simple moving averages recently formed a golden cross. Historically, this pattern has led to gains of 50%, 125%, and 65%, suggesting a potential rally if buyers step in around current levels.

Investors are caught in a tug-of-war between caution and optimism. Pattern watchers warn of a significant drop if support breaks, while strong hands from major players may cushion any slide and spark a rally. Investors should monitor the $104,000–$105,000 range for signs of weakness or strength. A break below this level could open the door to a move toward $23,500, while a clean break above $106,000 might signal the next leg up. Regardless, volatility is expected to remain high, making risk management crucial.