Bitcoin is enjoying a day of bullish price action, but any disappointment related to the markets’ anticipation of a crypto-related executive order from President Trump on Jan. 23 could trigger a correction in BTC (BTC) price.
Bitcoin price rallied after Senator Lummis’ X post. Source. X
Some analysts believe Bitcoin price could be headed to a correction below $96,000, based on emerging technical chart patterns, especially as markets remain increasingly sensitive to tightening economic conditions in the United States.
Bitcoin may correct to $96,000 based on “diamond pattern”
Bitcoin's (BTC) price may be poised to a correction below $96,000, according to the “diamond” technical chart pattern, which indicates a momentum reversal for the underlying asset.
These chart patterns occur at local price tops or bottoms, but may only represent a temporary trend reversal, wrote crypto trader Blackmore, in a Jan. 22 X post:
“It’s quite a tricky setup, it’s usually best to wait for it to play out, before making a move, rather than trying to get the break from structure… Technical target for this is around $94,000 - $96,000.”
Bitcoin diamond chart pattern. Source: Blackmore
Bitcoin may see a reversal or lack of significant momentum for the next few months, wrote Ki Young Ju, the founder and CEO of CryptoQuant, in a Jan. 22 X post:
“Bitcoin might pull back or move sideways for months. Not sure the bull cycle is over as other on-chain indicators remain bullish.”
BTC: P&L Index Cyclical signals. Source: CryptoQuant
Ju’s predictions are based on the Bitcoin P&L Index, a momentum indicator that incorporates three key metrics to determine the optimal Bitcoin allocation strategy and deliver lower drawdowns for investors.
Related: $36T US debt ceiling signals Bitcoin correction after Trump inauguration
Can Bitcoin maintain $101k key support?
Bitcoin may avoid further downside as long as it remains above the key $101,000 support, according to popular crypto analyst Rekt Capital.
“Bitcoin once again failed to daily close above the $106,000 range high resistance,” the analyst wrote in a Jan. 23 X post:
“Bitcoin has once again revisited the Range Low of $101,000 for a retest. The retest is in progress right now and any downside wicks as part of a volatile retest could see price wick into the blue diagonal.”
Bitcoin.USD, 1-day chart. Key support line. Source: Rekt Capital
A Bitcoin dip below $101,000 could introduce significant market volatility, as it would trigger over $1.34 billion worth of cumulative leveraged long liquidations across all exchanges, according to CoinGlass data.
Bitcoin exchange liquidation map. Source: CoinGlass
Additionally, Bitcoin price may also be pressured by concerns over tightening monetary policy, according to Ryan Lee, chief analyst at Bitget Research. The analyst told Cointelegraph:
“A recent dip and concerns over potential global interest rate hikes have created short-term bearish sentiment. However, institutional buying, particularly from World Liberty Finance, may stabilize prices.”
Target interest rate probabilities. June 18. Source: CME Group
Markets are now expecting the first US interest rate cut to occur on June 18, according to the latest estimates of the CME Group’s FedWatch tool.
Related: Bitcoin correlation with Nasdaq soars as CPI fears intensify