Will Bitcoin Price Plunge Again?

Bitcoin is still down 60% from its all-time high in November 2021, so many traders are wondering whether the BTC price will plummet further in the coming months.

Looking at the price chart for the year, Bitcoin (BTC) remains in the midst of a bullish reversal. BTC prices have risen 70% since bottoming around $16,800 in November 2022, overcoming interest rate hike concerns while benefiting from growing optimism over ETF approval.

However, in recent months, Bitcoin bulls have failed to sustain BTC prices above $30,000. So with over 200 days until the “bull run” halving, many traders are wondering: will Bitcoin price cash in again in the coming months?

Let's take a closer look at what's possible as the third quarter comes to a close.

Fibonacci fractals hint at Bitcoin falling to $21,500

From a technical perspective, Bitcoin price has stabilized around the 0.236 Fibonacci retracement line of the swing high (market top) of $69,000 to the swing low of $15,900 (Local market bottom).

This flat BTC price action looks very similar to what happened during the 2018 BTC price correction.

In 2018, the Bitcoin/USD pair stabilized around $6,790 around the 0.236 Fib line for several months before falling towards $3,000 in December. The $3,000 level is consistent with multi-year uptrend line support now (marked as bear market support in the chart above).

Bitcoin has now repeated its 2018 halving and the price has flatlined at the 0.236 Fib line. A break above this level means BTC price will see $21,500 as the next major support level, a drop of 17.75% from current levels.

Strong dollar increases downside risks for Bitcoin

At the same time, the U.S. Dollar Strength Index (DXY), which measures the strength of the U.S. dollar against a variety of major foreign currencies, has reached its highest level since November 2022.

The index has been negatively correlated with Bitcoin throughout 2023.

Source: Golden Finance