Bitcoin price starts recovering after a major correction

Bitcoin price progressed nicely over the entire past week, only to start experiencing issues as it approached the next major milestone. It is likely that a strong resistance, coupled with some negative developments, caused the price to drop and return to $45k. Fortunately, the coin has already started to recover, and it mostly nullified yesterday’s negative movement.

Fundamental analysis: BTC approached the next major milestone

Bitcoin price grew strongly recently, reaching a brand-new all-time high only days ago, over the weekend. However, as soon as it did, the price saw a strong drop of over $13,000. While it is not unusual for BTC to drop after a rapid surge — partially due to investors starting to sell in order to make profit, and partially because strong resistances typically do reject the price — it is also very likely that recent news had both positive and negative impact on the price performance.

One thing that could be considered negative is a recent statement by an investor Michael Burry, who said that the government might try to squash Bitcoin in a ‘Big Short.’ In essence, he believes that the government might be concerned about its own currency enough to actually make an effort to destroy Bitcoin. In fact, he wouldn’t put it past the government to even go against gold, if it comes to that.

Janet Yellen, the new US Treasury Secretary appointed by President Biden is certainly proving his point, as she continued to claim that Bitcoin is ‘extremely inefficient and highly speculative,’ particularly as the coin’s price dropped over Sunday and Monday.

It was not all bad, however, as many others claimed that Bitcoin is not a threat to the USD and the US economy. Federal Reserve Bank’s President, James Bullard, said so himself. He does not feel optimistic about the future of Bitcoin, however, noting that there were various versions of dollars issued before the Civil War by banks whose popularity crashed over time. He expects to see the same happen to BTC.

Peter Brandt, a well-known veteran trader, on the other hand, has a more optimistic view of the future of BTC. He recently predicted that BTC can skyrocket, and even peak at $200,000 per coin. However, before it happens, he expects some deep corrections to take place. This recent correction already ended, and the coin is already recovering, but it is possible that even stronger ones await in the future.

It is also worth noting that the number of crypto-friendly people in high places is growing faster than ever, particularly as Federal Reserve recently appointed a pro-Bitcoin Chief Innovation Officer, Sunayna Tuteja.

Technical analysis: Bitcoin recovers after a price drop

According to CEX.IO data, Bitcoin price reached its brand-new all-time high last Sunday, February 22nd. The coin climbed to $58,400, approaching quite close to a massive next resistance level at $60k. It is possible that the resistance rejected the price, as the oversale started only after the coin’s value plummeted. 

The drop continued on Monday, causing a massive surge in volume. The oversale continued, causing the price to crash even further, eventually sending BTC back to $47,600. The Tuesday drop sent it further down, to $45k per coin. While this is still quite high given the coin’s value over the past few years, it represents a $13,000 drop.

Fortunately, Bitcoin started to recover in the second half of the day, first rising to $49,600, which was followed by another correction back to $45,500. After that, BTC once again surged to $50,946 earlier today, and at the time of writing, it sits at $50,766.

For the moment, BTC is seeing strong fluctuations which will likely continue for some time. But, the oversale seems to have ended, and the coin might be ready to continue surging anew.

Where will Bitcoin go from here?

According to Bitcoin’s stock-to-flow model, we expected it to reach $50,000 by the end of Q1. So far, Bitcoin has been surging so strongly that it breached this milestone significantly earlier, and it even climbed up to near-$60k level. The correction that followed is nothing surprising, although we believe that the coin will keep going up towards $80,000, which is our prediction for the end of Q2. Bitcoin price prediction is rather an uncertain prospect in the context of current reality. You can easily see it from this last year’s research.

Of course, Bitcoin could hit this mark much earlier, given the rapid rise that we have seen in the past several days. Institutional demand gives it near-unlimited potential, and it will be interesting to see how far the coin can go.

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