How low can the Bitcoin price go?

Bitcoin has slid roughly 10% after Bitcoin ETF approval, sparking debate on how much BTC price could drop in the near term.

Bitcoin (BTC) price is down by roughly $4,000 since the approval of Bitcoin spot exchange-traded funds (ETF) in the U.S., signaling a growing “sell-the-news” sentiment in the market. Meanwhile, technical chart patterns hint at the possibility of a continued sell-off in the coming days or weeks.

What could happen next, and how low could the Bitcoin price go?

Bitcoin’s maximum pain target is $34,850

As seen on the daily chart below, Bitcoin’s price trajectory shows consolidation within a bullish channel. 

The 50-day exponential moving average (50-day EMA; the red wave) has provided support near $42,120, with prices oscillating above it as of Jan. 14. However, the relative strength Index (RSI) hovers near the mid-line, indicating a lack of strong bullish momentum.

In addition, the RSI has recently formed lower highs as opposed to Bitcoin’s higher highs, a sign of growing bearish divergence.

Therefore, if the BTC price breaks below the 50-day EMA, it could seek the next support near the bullish channel’s lower trendline. This trendline coincides with Bitcoin’s 200-day EMA (the blue wave) near $34,850, a low not seen since the Q4, 2023-consolidation phase.

Bankers will crash Bitcoin to $25K-30K

However, market commentators such as Crypto Poseidonn see a Bitcoin price crash toward the $25,000-30,000 range, noting that this is where most recent buyers accumulated BTC.

In the first scenario, investors that have acquired Bitcoin between $25,000 and $30,000 on ETF approval expectations will not profit much because bankers will likely not pay them a substantial premium over these prices.

Therefore, as Bitcoin approaches $30,000, the bankers may buy from investors, establishing a new market bottom.

However, the market may correct below $25,000 in the second scenario, allowing new institutional investors to acquire even more BTC with leverage.

Another analyst, Rhaonnor, argues that the market has already priced in the Bitcoin ETF rally, suggesting that the range between $24,000 and $32,000 should hold.

However, not everyone agrees as trader il Capo of Crypto expects this level to possibly crack before the ultimate price target of $12,000. 

“Interest rates were increasing during 2004-2007 and when the FED pivoted, the market started dropping to new lows,” the trader explained his reasoning on X last month. “Now we are in a similar situation.”

Can Bitcoin resume its upward trajector?

Bitcoin’s ability to hold its prices above the 50-day EMA will determine whether more upside is to come in the short term.

BTC price could further climb toward $50,000 or $60,000 in the coming weeks, as predicted by Lucas Kiely, chief investment officer at Yield App, and Christos Makridis, the founder/CEO of Dynamic AI. He added:

We will see a minor pullback, but it’ll be nothing to write home about. It may take a little while for it to surpass the $50,000 threshold. But by June, the halving will be out of the way, and the price should be higher.

Related: Bitcoin ETFs attract $1.4B in two trading sessions

Interestingly, Bitcoin’s prevailing bull pennant pattern indicates a possible price rally toward the $50,000-60,000 range, as shown below.

Bull pennants are bullish continuation patterns that get resolved after the price breaks above the upper trendline and rises by as much as the previous uptrend’s height.

The pattern shows that the BTC price can reach $56,200 by March 2024. Nonetheless, a break below the pennant’s lower trendline would bring the bearish targets mentioned above.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.