Bitcoin's price is predicted to undergo a significant decline to reach $50,000 before initiating a larger parabolic surge, according to several prominent analysts in the crypto world. The formation of a "double-top" price pattern currently unfolding serves as the primary indicator for this potential downturn.
Double-Top Pattern: Strong Bearish Signal Markus Thielen, founder of 10x Research, explained in an analyst note published on June 24 that Bitcoin is following a technical double-top pattern and currently testing its support levels.
This pattern forms when the price reaches two similar peaks with a slight decline in between, maintaining support above a common line known as the "neckline." The pattern typically completes when the price falls below the neckline, potentially dropping by the distance between the peaks and neckline.
"Bitcoin could transition from trading within the current range ($60,000-$70,000) to forming a top formation, which could lead to sharper declines," said Thielen. "This formation could easily see a drop to $50,000—or even $45,000."
Thielen added that despite potential positive impacts from the upcoming US elections and Consumer Price Index (CPI), Bitcoin's price could still undergo a sharper correction.
Impact of Decline and Post-Halving Speculation Recent Bitcoin trading has indeed shown high volatility. After nearly hitting $70,000, nearing its all-time high, BTC's price has now dropped to $63,000. This decline is largely attributed to quick sell-offs by miners, profit-taking by investors near lifetime peaks, and outflows from US-listed exchange-traded funds (ETFs).
Several leading crypto traders speculate on Bitcoin's price post the halving event on April 20, which reduced Bitcoin miner block rewards by 50%, from 6.25 BTC to 3.125 BTC. Crypto trader Jelle noted that current Bitcoin price action mirrors the post-2016 halving cycle and is "circling around the previous cycle peak."
Jelle stated this is part of a "shakeout effect," where much uncertainty is released at the current prices. "Either this is really overdone, or we are close to the low point," added Jelle in a post on X on June 24.
Short-Term Perspective and Expectations Meanwhile, crypto trader Rekt Capital believes there is significant potential for further upward movement in the short term. In a post on June 24, he stated that the market is currently approximately 40% through the "bull market" phase.
This suggests that the recent dip in BTC prices below $60,000 provides buyers an opportunity to accumulate more as prices fall before Bitcoin enters a "parabolic uptrend."
On the other hand, upcoming economic data could also play a crucial role in Bitcoin price movements. The Personal Consumption Expenditures (PCE) price index for May, the Federal Reserve's preferred inflation gauge, is expected to show the slowest monthly increase in three years. This could strengthen the case for a Fed interest rate cut starting as early as September, potentially supporting risk assets including Bitcoin.
In a weekly bulletin shared with CoinDesk, Greg Magadini, director of derivatives at Amberdata, said, "Strong recent economic data has pushed bond yields higher and precious metals lower on Friday. This continues to hinder digital hard assets like crypto."
With several Fed governors scheduled to speak, along with GDP and PCE data releases this week, economists expect no significant changes in the PCE price index and only a slight 0.1% increase in core PCE, which is a 2.6% year-over-year rise.
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