Bitcoin Price Forecast: Overbought signal indicates a 13% decline, analyst says
- Investors should prepare for a potential double-digit decline Bitcoinaccording to Katie Stockton.
- The senior technical analyst said she saw Bitcoin finding support at $84,500, suggesting a 13% decline.
- Minor support for Bitcoin could be around $73,800, which would mean a 25% drop in a sharp sell-off.
Katie Stockton of Fairlead Strategies said Bitcoin appears poised for a double-digit decline thanks to technical signals suggesting the currency has been “overbought” recently.
In a note to clients on Tuesday, the chief technical analyst said she expects further near-term weakness for the top cryptocurrency, despite the token recovering to the $100,000 level.
Stockton predicted that Bitcoin looks on track to find support around the $84,500 level, which would mean another 13% drop from current levels in the next sell-off.
She added that Bitcoin could find minor support at the $73,800 level, implying that the currency could fall by up to 25% if the sell-off is steeper than expected.
“Bitcoin is currently experiencing a rebound, but we expect it to fade quickly, resulting in a smaller rally compared to its peak in December,” Stockton said. “The weekly stochastic is actively pulling back into the overbought zone, and the daily stochastic is in a new overbought zone, so we believe further upside will be limited in the near term.”
However, Stockton said she remains bullish on Bitcoin in the long term, pointing to a strong long-term backdrop that could support the cryptocurrency throughout 2025.
Bitcoin has been on a roller coaster ride since Presidential electionswith bullish sentiment growing as cryptocurrency traders look forward to lower interest rates and a more crypto-friendly environment under the new administration. Perhaps the most hopeful development is the possibility of… National Bitcoin Reserve Under Trump, which would see the US government buy and hold Bitcoin as a strategic asset.
The currency took a beating this week. It rose sharply on Monday, crossing the $100,000 threshold, but fell 4% on Tuesday as selling pressure resumed. It was trading at around $97,000 at 12:45pm on Tuesday.
