Bitcoin may be heading for a prolonged pullback, with technical indicators pointing to increasing bearish momentum in the short term. After a powerful rally following the U.S. election, the flagship cryptocurrency is now showing signs of exhaustion. According to a leading technical strategist, Bitcoin could see a correction lasting several weeks, with key support levels now in focus.
👉 Discover how market cycles could shape Bitcoin’s next major move.
Warning Signs in Bitcoin’s Technical Structure
Katie Stockton, founder of Fairlead Strategies, has identified several technical signals suggesting that Bitcoin’s upward momentum is weakening. In a recent client note, Stockton highlighted that Bitcoin dropped below its 50-day moving average last week—an important threshold that often signals a shift in market sentiment.
“This confirms an intermediate-term overbought condition and a sell signal,” Stockton noted, adding that the development supports the possibility of a price correction in the first quarter of 2025.
Two key momentum indicators are now flashing red:
- Daily MACD (Moving Average Convergence Divergence) has turned negative.
- 20-day moving average shows declining short-term momentum.
Together, these metrics suggest that Bitcoin is entering a phase of short-term bearish bias. While not definitive proof of a crash, they do indicate growing pressure for a pullback.
Key Support Levels to Watch
Should the downward pressure continue, traders and investors should keep an eye on two critical support zones:
- First support at $84,500: A drop to this level would represent approximately a 10% decline from current prices. This zone aligns with previous resistance-turned-support and could act as a temporary floor.
- Second support at $73,800: If selling intensifies, this level could become the next battleground—a roughly 22% drop from recent highs. Historically, such deep corrections have occurred after major euphoric rallies, often resetting the market before the next leg up.
While these figures may sound alarming, they are well within the typical volatility range for Bitcoin, especially after a surge of over 120% in 2024.
Short-Term Weakness vs. Long-Term Strength
Despite the near-term caution, Stockton remains bullish on Bitcoin’s long-term outlook. She emphasizes that monthly-level indicators continue to paint a positive picture.
In particular:
- Monthly stochastic oscillator remains in healthy territory, not yet overbought.
- Monthly MACD continues to trend upward, signaling sustained bullish momentum over the longer horizon.
“I view any correction as an opportunity to increase Bitcoin exposure,” Stockton said, reinforcing a strategy favored by many seasoned investors: buying weakness during established bull markets.
This dual-timeframe perspective—bearish short-term, bullish long-term—is increasingly common among institutional analysts who recognize that volatility is inherent to Bitcoin’s price discovery process.
From $16K to $108K: A Historic Rally in Motion
Bitcoin’s journey since its last major low has been nothing short of extraordinary. Two years ago, BTC traded near $16,000**, following the collapse of major crypto platforms and widespread market pessimism. Today, it has surged over **600%**, briefly surpassing **$108,000 in December 2024.
This rally has been driven by three powerful tailwinds:
- Regulatory clarity improving: Growing acceptance of crypto regulations in key markets has reduced uncertainty.
- Macroeconomic conditions turning favorable: Lower inflation and potential rate cuts have boosted risk appetite.
- Institutional demand surging: Spot Bitcoin ETFs and corporate treasuries are now major players in the market.
👉 See how investor sentiment shifts can unlock massive crypto gains.
What History Says About Bitcoin’s Future
Looking back at past cycles since 2017, Bitcoin has followed a consistent pattern: roughly every four years, it enters a new bull market phase after a halving event. Each cycle has delivered massive returns:
- Gains ranging from 1,700% to 2,300% during bull runs.
- Followed by drawdowns of 70% to 80% during bear markets.
Given that the last halving occurred in April 2024, many analysts believe the current cycle could still have significant upside potential over the next 18–24 months.
Expert Price Targets for 2025
Several prominent voices in the financial world have issued bold forecasts:
- Tom Lee, Founding Partner at Fundstrat Global Advisors: Predicts Bitcoin could reach $250,000 in 2025.
- Standard Chartered Bank: Projects a target of $200,000, citing strong institutional inflows and limited supply.
Even if these targets seem aggressive, they reflect growing confidence in Bitcoin’s role as a macro hedge and digital store of value.
FAQ: Understanding Bitcoin’s Market Cycle
Q: Why is Bitcoin showing sell signals now after such a strong rally?
A: Rapid price increases often lead to overbought conditions. Technical indicators like MACD and moving averages help identify when momentum is unsustainable. A pullback allows the market to reset and attract new buyers at higher confidence levels.
Q: Is a 10–22% correction normal for Bitcoin?
A: Absolutely. Bitcoin regularly experiences double-digit drawdowns—even during bull markets. These corrections are healthy and often precede renewed upward momentum.
Q: Should I sell my Bitcoin if it drops to $84,500?
A: That depends on your investment strategy. For long-term holders, dips like this can be buying opportunities. Short-term traders might take profits or tighten stop-losses. Always assess your risk tolerance before acting.
Q: How reliable are technical indicators like MACD and moving averages?
A: While no indicator is foolproof, tools like MACD and moving averages have historically provided valuable insights into trend changes—especially when used in combination and across multiple timeframes.
Q: What happens if Bitcoin breaks below $73,800?
A: A breakdown below that level could trigger extended selling pressure, potentially extending losses toward $65,000 or lower. However, such a scenario would likely attract strong buying interest from institutions and whales accumulating at discounted prices.
👉 Learn how smart money moves before major market reversals.
Final Thoughts: Volatility Is the Price of Innovation
Bitcoin’s path has never been smooth—but its long-term trajectory remains upward. The current signs of short-term weakness should not overshadow the broader narrative: increasing adoption, maturing infrastructure, and growing recognition as a legitimate asset class.
For informed investors, periods of uncertainty often present the best opportunities. Whether you're watching support at $84,500 or preparing for a potential run toward $200,000+, understanding both technical signals and macro trends is key to navigating this dynamic market.
As history has shown time and again, patience and discipline tend to be rewarded in the world of cryptocurrency. The current phase may be one of consolidation—but it could also be setting the stage for the next explosive leg higher.
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