Bitcoin, a vertical drop to $41,400?...Hidden correction signals in a bull market

▲ Bitcoin (BTC)/AI generated image

An analysis suggests that Bitcoin (BTC) is on the verge of an unprecedented bull run and will undergo a final correction phase, dropping to $41,400, following a pattern similar to past bull market cycles.

Crypto analyst Ali Martinez, in a Bitcoinist report on April 12 (local time), diagnosed that the current market has entered a mid-bull market lull based on his analysis of Bitcoin's past price data. Martinez analyzed that the typical correction pattern that occurred every time before Bitcoin broke its previous all-time high is repeating itself. Martinez emphasized, "In light of past examples, a temporary price pullback is essential for a bull cycle to complete."

According to the analysis, Bitcoin is undergoing a healthy correction process after reaching an overheated zone on the Market Value to Realized Value (MVRV) indicator. In past bull markets of 2017 and 2021, Bitcoin experienced price corrections of approximately 30% to 40% from its peak before its full-blown surge. Based on historical recurrence, Martinez predicted that Bitcoin could fall from its current price level to around $41,400.

The core reasons for the correction are short-term holders' desire to realize profits and excessive leveraged liquidations in the futures market. $41,400 is a psychological support level and an area where institutional investors are expected to accumulate heavily. Martinez analyzed that if the price reaches the target point, strong buying interest at lower prices will flow in, offsetting the market's downward pressure. Bitcoinist assessed that Bitcoin's correction will serve as an opportunity to remove market froth and secure long-term upward momentum.

The macroeconomic environment is also a factor driving price volatility. Uncertainty in the U.S. central bank's interest rate policy and geopolitical tensions are causing a flight from risk assets. However, capital inflows through Bitcoin spot ETFs from large asset managers like BlackRock remain robust. Martinez diagnosed that the inflow of institutional funds will act as a safety net in a downturn, supporting the price floor.

Bitcoin is currently in an energy condensation phase, on the cusp of a massive leap. A return to $41,400 is interpreted not as the start of a bear market, but as a springboard for an even greater ascent. Investors need insight to read the entire market cycle rather than reacting to short-term volatility. Martinez urged maintaining a long-term perspective, stating, "Corrections are painful, but ultimately they are just part of a bull market."

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*