Bitcoin (BTC) cryptocurrency rate did not consolidate above the resistance zone at $ 50,000 and began to decline. Therefore, BTC/USD should drop in price to $ 40,000 by March 9th.
On February 28, the Bitcoin price dropped to its lowest value in the last three weeks – $ 43,010 (Bitstamp data). As a result of the dump that started on February 21, the coin fell by 26%. Having reached the bottom, the value of the coin began to rise on Sunday, and in a day and a half increased by 16%.
During the bullish trend, the BTC rate soared to $ 50,250. However, buyers did not build on the success, despite the small volume of coins sold at this level. Therefore, the trend changed to bearish, and in a few hours, the cryptocurrency fell in price by almost 4%. BTC/USD dropped to 23.6% Fib recorded during the pump from $ 43,010 to $ 50,250. Judging by the current downward trend, in the near future, the asset rate will overcome $ 48,533 and fall to $ 47,478 (38.2% Fib).
Many traders and analysts believe that the dump has stopped and are predicting a bullish trend. As a confirmation of this point of view, the situation that arose in January 2021 is usually cited as an example. At that time, BTC dipped by 28% after a powerful pump, but eventually went up again. If we draw an analogy, then we can assume that after an upward rebound, Bitcoin will reach a new bottom around $ 40,000 by March 7. Then BTC/USD will rise and double in price.
According to Stock-to-Flow model created by the analyst under the pseudonym Plan B, BTC rate is now in danger of falling. The price of the virtual currency has exceeded the Stock-to-Flow indicator, which indicates that the asset is overvalued. Beginning in 2011, in all cases where the red line representing value was above the gray line, there was a bearish trend. On the other hand, in 2017 the price stayed above the Stock-to-Flow indicator for a rather long period of time. If this situation repeats this year, then the current decline in the BTC rate should be considered as a corrective wave before the fifth wave of the upward trend.
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