bitcoin price rose above $50,000 and mounted a sustained rally to $53,000 before retreating lower, something that has taken the market by surprise. However, with expectations getting stronger for the cryptocurrency, it could be a sign that it is time for a possible correction and crypto analyst and market expert Michaël van de Poppe believes that this correction could become as deep as 40 %.
Sentiment May Tell the Wrong bitcoin Story
in a mail Taking place on X (formerly Twitter), the crypto analyst outlined a number of things that could affect the price of bitcoin, either positively or negatively, and one of them is market sentiment. Michaël van de Poppe explained that market sentiment “is always the wrong indicator” and is something that investors should apply in their strategy.
To further elaborate on this point, the crypto analyst gave a couple of examples where the sentiment has been proven wrong. The first is the Spot bitcoin ETF approvals, which saw calls for a new bitcoin all-time high. However, although the price of btc would increase, it did not reach a new all-time high. “The strength of the markets has already been reflected in the actual price action, but sentiment always overshoots as emotions are reflected in scenarios, hence emotions have a negative impact on trading and investment,” the analyst explained.
Michaël van de Poppe also pointed out another scenario where the sentiment was wrong and that was when the price fell from $49,000 to $39,000. This was a result of outflows from Grayscale bitcoin Trust (GBTC), which the market expected to continue. However, the outflows would eventually slow, giving room for the btc price to recover.
Last but not least is the current market trend which, according to the analyst, is generating a lot of interest. Unsurprisingly, the sentiment among investors is that this interest would continue, but the crypto expert explains that in situations like these, “emotions always outweigh reality and sentiment outweighs price action by a mile, which is why that people start to lose money.
Will btc Price See a 40% Correction?
Following the massive rally that the price of bitcoin has experienced in recent weeks, the crypto analyst advises investors to have a plan of action when approaching the market, whether for trading or investment purposes. He notes that there is a possibility of a market correction once a turn in macroeconomic events occurs. One of them is the CPI, which rose last week, as well as a decrease in capital inflows as investors begin to withdraw from the market.
Michaël van de Poppe clarifies that inflows are not solely coming from spot bitcoin ETFs, as there are other avenues for inflows where investors could also start selling their coins. “These corrections, with the current sentiment, are going to be rapid,” warns the analyst. “I don't know exactly where they will occur, but given the data, it is reasonable to suspect that the markets are peaking between $53,000 and $58,000 and will receive a 20-40% correction from there.”
<img decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2024/02/Finance-Expert-Predicts-Bitcoin-Will-Hit-100000-Soon-Here39s-When" alt="Tradingview.com bitcoin Price Chart” width=”3286″ height=”1530″/>
btc price continues bullish trend | Source: BTCUSD on Tradingview.com
Featured image from Earth.Org, chart from Tradingview.com
