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Bitcoin (BTC) closed the week above the $100,000 mark for the first time in history, capping the cryptocurrency’s huge week with a new milestone. However, a market watcher has warned investors that historical patterns could soon lead to a major correction for the flagship crypto.
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Bitcoin first weekly close above $100,000
Bitcoin reached the $100,000 milestone almost a week ago, passing the psychological barrier for the first time. After its tremendous performance, the largest cryptocurrency by market capitalization suffered the biggest setback since Trump’s victory in the US presidential elections.
BTC briefly fell about 13% to the $90,000 mark, in a candle similar to its performance when it first reached the $10,000 mark. Since then, the cryptocurrency has fluctuated between the $97,000 and $101,000 Prince range, with some resistance to moving past the higher end of the range.
As reported by NewsBTC, crypto analyst Jelle noted that BTC could follow the same path as its milestone trajectory after $10,000, with the newly breached level turning into support after three days, as it did in November 2017.
After hovering between its new range for four days, Bitcoin recorded its first daily close above $100,000 on Sunday. This performance also marked the first weekly close above this barrier and showed a similar weekly performance to the $10,000 candle.
Crypto analyst Rekt Capital marked that BTC’s daily close above this level and Monday’s 2.5% pullback is “technically a retest” of this level. However, the ongoing retest is very volatile and there is a simultaneous attempt to convert the “last major daily resistance”, around the $98,000 zone, into support over the past two days.
The analyst added: “A volatile retest like this makes sense, especially on a weekly basis.” He explained that the $98,000 level had been broken as resistance on the weekly chart after yesterday’s close, meaning that “this week is all about regaining this level as new support.”
Will the coming weeks be ‘problematic’ for BTC?
Despite breaking the crucial barrier, Rekt Capital warned investors about BTC’s upcoming week of the “Parabolic Upside Phase” after the halving. The analyst previously explained that after each halving event, Bitcoin enters a parabolic period that lasts approximately 300 days each cycle.
Historically, BTC’s price records its first major pullback a month after entering price discovery mode. According to the analyst, the first “Price Discovery Correction” historically begins between weeks 6 and 8 of each parabolic phase, with at least 25% retracements.
Rekt Capital pointed out that today marks the sixth week of this post-halving upward phase, highlighting that BTC is the time frame where the price has pulled back significantly. Based on this, Bitcoin’s price could fall between 25% and 40% in the coming weeks, as it did in 2017.
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The analyst warned investors that the current retest of the $98,000 level is critical as failure to hold it could trigger the first major correction:
As a result, I’m going to be increasingly cautious with retest attempts over the next three weeks, and given BTC’s history at this point in the cycle, I wouldn’t be surprised if key levels are invalidated.
Nevertheless, he stated that “the Second Price Discovery Uptrend will occur after the Price Discovery Correction,” which could push BTC to a new ATH.
At the time of writing, Bitcoin is trading at $98,073, down 2% in the past 24 hours.
Featured image from Unsplash.com, chart from TradingView.com