We have been warning about this possible drop in Bitcoin's price in our recent publications, where we outline our Bitcoin price predictions. While many influencers and gurus predicted that Bitcoin would reach $120,000 or even $130,000, we were among the few who anticipated a significant crash. And we made this prediction when Bitcoin was still trading above $101,000. To back this up, here are the articles in question:
Why Has Bitcoin Fallen, and How Did We Know It Was Going to Drop?
To understand this, we need to examine the three phases that typically characterize a cryptocurrency’s market cycle. These phases, explained in more detail in the articles linked above, are as follows:
Phase 1: Bullish (Uptrend)
During this phase, the asset's price rises consistently, attracting more investors eager to ride the wave of positive momentum.
Phase 2: Corrective and Accumulative
This phase marks a correction where prices pull back. Investors, seeing the price as sufficiently reduced, seize the opportunity to accumulate more of the asset.
Phase 3: Bullish (Breakout)
In this final phase, prices not only recover but exceed the highs established in Phase 1, initiating a new bullish rally.
When we published our analysis, we identified that Bitcoin was in Phase 1, a bullish trend. However, no asset can rise indefinitely. Eventually, a correction becomes necessary, and profit-taking begins. This correction ushers in Phase 2, establishing a new support level before Phase 3 propels the asset to new highs.
How Did We Predict Bitcoin Would Drop at $101,000?
In our recent Bitcoin price predictions, we warned of a potential bull trap, and this scenario played out exactly as we had anticipated. But how did we make such an accurate prediction? The answer lies in understanding market phases.
We knew the market was in Phase 1 and would inevitably transition into Phase 2. The determining factor was recognizing that the $101,000 price range was a key profit-taking level for smart money. In simpler terms, two bearish factors converged, significantly increasing the likelihood of a downturn:
Smart Money Profit-Taking: Large investors tend to sell after a significant rally to secure profits.
Excessive Rally from $55,000: Bitcoin had climbed dramatically from $55,000, indicating clear overbought conditions. Combining these factors made it evident that the price was nearing the end of Phase 1.
Conclusion
Understanding market phases and observing price behavior allowed us to anticipate this drop. For investors, this is a crucial reminder to analyze the market objectively and avoid being swayed by widespread enthusiasm.
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Disclaimer: The content of this article is for informational purposes only and does not constitute financial advice, investment recommendations, or a suggestion to buy or sell assets. Cryptocurrencies and digital assets are highly volatile and may involve significant risks. Always conduct your own research (DYOR) and consult with a professional financial advisor before making investment decisions. The author and the website are not responsible for any loss or damage that may arise from investments based on the information provided.
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