Bitcoin’s price dropped by four percent in the last 24 hours, but it is improbable that we’ll see a correction like in prior cycles.
The value of Bitcoin has increased by 36 percent in the last 35 days, showing a powerful rally. The market sentiment has been positive because of the rising institutional demand and the view of BTC as an inflation hedge.
However, after a massive uptrend, the belief that BTC may dip has begun to increase. While a slight correction can happen, like the four percent downward move to just under $13,000 on October 28th, a massive downtrend is becoming rather unlikely.
Bitcoin was at $13,860 at the day’s peak, marking the top of the July 2019 rally. After encountering such a resistance zone, a slight pullback is expected. Following a dip below the $13,000 line, BTC has quickly recovered to $13,150, showing flexibility.
Expecting Obstacles Before Hitting $20,000
During the last 11 months, the Bitcoin price has fluctuated in cycles. One of the most used narratives for this is the block reward halving, where almost every four years, the blockchain cuts in half the amount of BTC mined.
The halving decelerates the pace at which new BTC is created, making all the circulating supply decrease with time. The year following every halving, BTC had rallied rather strongly, as seen in December 2017, when it managed to get to $20,000, after the July 2016 halving.
In case a similar pattern follows, the price of Bitcoin will probably hit $20,000 in March 2021, Ceteris Paribus, an analyst, said: “For $BTC to match last cycle’s time to regain all-time high, it would need to hit $20k on March 11th, 2021. It would be kind of poetic for it to happen a year after (arguably) the most infamous day in bitcoin’s history.”
Therefore, analysts expect the path to $20,000 to be studded with obstacles and slight corrections in the medium term.