The possibility of Bitcoin returning to $30,000; Has the price reached its mid-cycle peak?
Despite the price of Bitcoin rising to more than $45,000, an analyst, citing the historical trend of Bitcoin’s DMI index and current market funding rates, argues that there is still a possibility of a significant drop in the price to $30,000.
To Report Cointelegraph, a popular CryptoCon analyst, argued in a post on X on January 1 (Dec 11) that it is still possible for the price of Bitcoin to return to $30,000.
Bitcoin DMI index at peak
According to Cryptocon, Bitcoin’s Directional Movement Index (DMI) has reached levels that are commonly associated with bearish trend reversals. This analyst explained:
I was bullish on Bitcoin growth through 2023, but the data shows us that it is time for a price correction in 2024. It’s a battle between reliable long-term data and those who think things will be different this time.
Looking at the current trend of the DMI indicator is similar to the period of mid-2019, the point at which the Bitcoin/USD pair is now in the middle of its previous price cycle.
At that time, the price of the pair more than halved over the next 16 months, exacerbated by losses in other markets due to Covid-19 in March 2020.
Although the current correction probably won’t be as drastic as the previous one, as seen in the Glassnode chart, the cryptocurrency’s view of a 30% price drop is in line with past trends. He stated:
A 30% correction after the DMI enters the bullish zone will lead us to a price drop to the $30,000 range, which is much lower than previous trends.
Kryptokon Description:
The current data structure is exactly the same as in 2019 with two peaks in red. But I think the current correction will be much less than 50% and it won’t take that long.
The analyst posted an update on January 2 (Dec 12) noting that due to the excitement surrounding the impending decision by the US Securities and Exchange Commission on the first spot bitcoin ETF in the United States, there is a possibility that the price of bitcoin before correcting to 48. 000 dollars to increase.
Financing rates and different perspectives
According to market data, the price of Bitcoin started to fall before the opening of the Wall Street market in the new year. At the time of writing, the price of Bitcoin is hovering around $45,100.
This reduction is manifesting itself in the form of some of the highest funding rates we have seen over the past year. This means that traders are probably convinced that Bitcoin’s jump to higher prices is guaranteed.
DaanCrypto noted that funding rates are still relatively high despite a slight decrease compared to last week.
However, not all market analysts are concerned about this issue. Horse, the well-known analyst and trader, noted that compared to past cycles, the funding rate is within a reasonable range.