Bitcoin (BTC) recently hit a new high of $100,000, but some experts believe a correction is coming.
Significant Bitcoin Price Correction Expected
According to one expert, bitcoin (BTC), which has rallied since Donald Trump’s electoral victory on Nov. 5, recently broke through the $100,000 barrier partly because the “cryptocurrency market is fond of round figures.” However, Sergei Gorev, Head of Risk at Youhodler, argues that BTC, whose growth is linked to that of the S&P 500 index, is now “ready to start a significant price correction.”
In comments shared with Bitcoin.com News moments after BTC finally broke the $100,000 mark, Gorev asserts that “divergences” in price charts seem to already point to this. He added that the growth of the USD exchange rate on the world stage also hints at the same.
Nearly two weeks after it failed to surpass the $100,000 mark, BTC rocketed to a new all-time high on Dec. 5. Seeing the crypto asset achieve this feat two years after it dropped below $16,000 has prompted delighted BTC proponents to predict further milestones for the top crypto asset.
However, Gorev insisted that there is currently nothing substantial to fuel another significant rally.
“Despite the significant milestone of $100K, there is less and less fuel for a substantial rise in the price of BTC. The price increase may still continue, but not significantly. Many technical indicators have already lined up in the direction of price correction, and many algo traders will start looking for an entry point to open short positions in order to defuse divergences on the charts,” Gorev stated.
Retail Sentiment Fuels Bitcoin Rally
Meanwhile, Ruslan Lienkha, another analyst at Youhodler, said the upward momentum is likely to continue, at least until the expiration of futures and options contracts on major U.S. exchanges. However, Lienkha said BTC, which he said exhibits the “strongest historical correlation with U.S. stock indices,” will likely trend downward if there is a downturn in equities.
Regarding the drivers of the current rally, Lienkha said “retail sentiment,” rather than institutional investors, seems to be the primary catalyst for price fluctuations in the cryptocurrency market. Lienkha warned, however, that “we may be approaching the final phase of this short-term cycle before a significant correction.” He said this scenario makes “future price action increasingly volatile and unpredictable.”
Lienkha emphasized the importance of managing risk in a market characterized by rapid price movements and speculative trading behavior.
