- Bitcoin could be heading for a multi-week correction, according to Katie Stockton.
- The strategist said Bitcoin was sending a “sell” signal, given recent trading trends.
- She predicted that the crypto could find support around $84,500, implying a 10% decline from current levels.
Bitcoin’s post-election momentum has weakened and the crypto could soon experience a sell-off that stretches for weeks, according to a top technical strategist.
Katie Stockton, founder of Fairlead Strategists, believes bitcoin could see another 10% decline, thanks to a handful of technical indicators that suggest near-term bearish momentum.
Over the next few weeks, the cryptocurrency could fall to a support level around $84,500, Stockton said, implying a 10% decline from current levels. If the price continues to decline, the next support level could be around $73,800, she added, implying a 22% decline from current levels.
Stockton pointed out that bitcoin fell below its 50-day moving average last week. This confirms a “medium-term overbought signal”, which supports a price correction in the first quarter of next year, she wrote in a note to clients on Tuesday.
“Short-term momentum is now negative relative to the daily MACD and 20-day MA, supporting the shift to a short-term bearish bias,” Stockton said, referring to mean convergence/divergence daily moving average and the 20-day moving average. on average, two other indicators that reflect short-term price trends.
Despite the potential for near-term weakness, Stockton remained bullish on bitcoin in the long term, pointing to several positive monthly indicators.
“Monthly stochastics and MACD continue to support a long-term bullish outlook for the new year, and would therefore view a correction as an opportunity to add exposure to bitcoin,” she added.
The price of bitcoin has fallen in recent weeks, erasing gains that took the crypto to a six-figure level in December. The coin is now down 1% for the month, but is on track to end 2024 with a 116% gain.
