Bitcoin's Potential for a Price Correction: Insights from Analysts

Bitcoin's recent decline has raised concerns among investors about a possible downturn. However, various market analysts suggest that an extended price correction could be beneficial in the long run.

Key Takeaways:

Analysts identify Bitcoin’s downside risk within the range of $65,000 to $75,000.
A potential three-day bullish divergence is developing, which could indicate a local bottom as momentum stabilizes.

Bitcoin's downside risk is believed to be concentrated around $65,000 to $75,000, according to analysts. They are observing a formation of a potential three-day bullish divergence, suggesting that when momentum stabilizes, it may signal a local price bottom.

Bitcoin's Potential for a Price Correction: Insights from Analysts

Current Market Dynamics Affecting Bitcoin's Price

The current price movements of Bitcoin are characterized by supply rotation and oversold conditions. Crypto trader Jackis explained that the current price range reflects macroeconomic factors for 2025. A drop to $70,000, according to him, would not mirror previous bear markets. Unlike the downturns seen in 2022 or early 2024, the present decline lacks substantial macro-driven risk pressures; instead, it indicates a shift in ownership from early investors to institutional players.

Market analyst Jelle pointed out a potential bullish divergence surfacing on Bitcoin's three-day chart. Historically, similar divergences have aligned with local bottoms in Bitcoin’s price pattern, though he noted that a confirmation of this requires more time and price consolidation.

Bitcoin 3-day bullish divergence possibility. Source: Jelle/X

Bitcoin's Historical Recovery Patterns Julien Bittel, head of macro research at Global Macro Investor, supports this perspective, emphasizing Bitcoin's historical recovery path following oversold Relative Strength Index (RSI) readings below 30. Data show that Bitcoin typically maps out a defined recovery pattern after reaching such conditions. Bittel expects short-term volatility but believes that bases can take time to establish and are often accompanied by fluctuating price movements before a more consistent upward trend reappears.

Importantly, Bittel argued that the traditional four-year halving cycle might no longer be the main factor driving Bitcoin's pricing behavior. Instead, he suggests that ongoing debt refinancing cycles and changing liquidity dynamics could keep the current market structure intact into 2026.

Bitcoin's market path with RSI dropped below 30. Source: Julien Bittel/X

Related: Bitcoin price at ‘critical’ point as whale moves $348M BTC to exchanges

The Outlook for Bitcoin's Future Cycles

Jurrien Timmer, director of Global Macro at Fidelity, situates Bitcoin's current phase within a larger wave structure that stretches from 2022 to 2025. This period has already achieved a compound annual growth rate (CAGR) of 105% over 145 weeks, aligning closely with long-term regression models.

While acknowledging the possibility of Bitcoin experiencing a more significant correction in the $65,000 to $75,000 range by 2026, Timmer highlights that these price levels have historically served as strong buying zones.

Bitcoin wave 6 price target analysis. Source: Jurrien Timmer/X

Looking ahead, Timmer anticipates that future cycles will exhibit flatter slopes as adoption increases. However, his price modelling implies a potential trajectory towards $300,000 by 2029 if a new expansion phase begins. In this context, corrective periods may lay the groundwork for Bitcoin's next stage of growth.

Related: Did Bitcoin's 4-year cycle break, and is the bull market really over?