The world’s largest cryptocurrency Bitcoin (BTC) sees selling pressure with the BTC price dropping another 1.5% to $39,677 as of press time. Some of the on-chain indicators suggest that the BTC price could drop another 10-15 % from here onwards.
BitMEX CEO Takes Defensive Measure on Bitcoin
In a recent statement, BitMEX CEO Arthur Hayes shared his insights on the Bitcoin market, projecting a potential 30% decline from the high of $48,000 reached following ETF approval. Hayes believes that the cryptocurrency could find support within the range of $30,000 to $35,000.
Taking a cautious approach, Hayes disclosed that he acquired 29 March 2024 $35,000 strike puts, expressing his readiness for a possible downturn in the market. Additionally, he revealed the strategic move of liquidating his trading positions in Solana and Bonk at a marginal loss.
In the event that Bitcoin drops below the $35,000 threshold, Hayes outlined his plan to engage in opportunistic buying, particularly focusing on accumulating positions in Solana and $WIF.
Hayes expressed a bearish sentiment regarding Bitcoin’s current outlook, stating that it appears “mad heavy,” and he anticipates a breach of the $40,000 level. His strategic move of going long on a $35,000 strike puts for March 29, 2024, aligns with his expectation of a market downturn, which he correlates with the US Treasury quarterly refunding announcement scheduled for January 31, 2024.
BTC On-chain Data
In a recent analysis, prominent crypto analyst Ali Martinez delved into historical trends in Bitcoin (BTC) price movements, specifically focusing on patterns observed during previous bull cycles.
Martinez highlighted a recurrent behavior where Bitcoin tends to retrace to the 50% Fibonacci level after hitting the 78.6% Fibonacci level in the aftermath of the last two bull cycles. Drawing parallels to the current market scenario, BTC has once again reached the 78.6% Fibonacci level, signaling a potential correction in the near term. According to this pattern, Martinez suggests a plausible scenario where Bitcoin could experience a drop to $32,700, aligning with the 50% Fibonacci retracement level.
Courtesy: Ali Martinez
Expanding on the broader sentiment cycle for Bitcoin, Martinez outlined the historical transitions from capitulation to hope, optimism, and belief. Following this cycle, a phase of anxiety typically ensues, characterized by a price correction. Notably, the analysis points to the ongoing 20% correction in BTC as part of this recurring pattern.
While acknowledging the current setback, Martinez remains optimistic, drawing parallels with historical trends. If history serves as a guide, the observed correction could be a temporary hurdle before the resumption of the overall uptrend in Bitcoin’s price.
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