The recent Bitcoin retracement may transcend a temporary market correction, as a top market analyst suggests early signs of a bull cycle top.
The rally to $113,510 on Thursday may just be another relief rally, as Bitcoin has relinquished all its gains today. The pioneering cryptocurrency has corrected 3.2% since the start of Friday, sparking a broader market retracement.
Meanwhile, the dump seemed to stun bulls, as over $202 million was liquidated in the past four hours, with $351 million of that coming from long positions. The tally took the 24-hour figure to $411 million, with Ethereum leading the way.
Specifically, he noted that Bitcoin saw the same divergence before the 2021 bull market top. For context, BTC reached a top of $64,898 in April 2021, then retraced massively to around $28,000. Again, it formed another higher high, reaching its 2021 peak of $69,000 in November of that year.
While this happened, the RSI was making lower lows. After the November peak, BTC crashed, reaching a bottom of $15,500 in November 2022.
Bitcoin has recently experienced a similar development, with its January peak of $109,354 and August ATH of $124,457, marking higher high formations. If history repeats, Martinez suggests this could be a sign of an early bull market top.
Mere Coincidence?
Interestingly, Bitcoin has a history of responding positively to bearish speculation. An instance occurred when veteran trader Peter Barndt highlighted a possible recurring double top pattern formation in June, which he noted would likely lead to a 75% crash.
Notably, he also emphasized that it shares similarities with that seen in the 2021 bull cycle, with Bitcoin peaking in its development. The outlook created panic, but Bitcoin responded with a strong performance, rebounding from the June lows to its recent ATH conquest.
Moreover, analyst Merlijn The Trader believes the recent downtrend is a mere retest. He insisted that Bitcoin was retesting January’s resistance to solidify the area as support before its next leg up.
According to the market watcher, history suggests that the next move is vertical. Meanwhile, he predicted that the next target is a rally to a new all-time high beyond $130,000, marking an over 18% increase from Bitcoin’s current price of $109,865.