Analysts Fear Bitcoin Is Facing A 10% Drop, What Makes Them Think So?

A top technical strategist has warned that the post-election rally for Bitcoin has weakened, and the cryptocurrency may soon experience a sustained sell-off lasting several weeks.

Katie Stockton, founder of independent research provider Fairlead Strategies, believes that Bitcoin could drop another 10% as some technical indicators show a bearish momentum for the cryptocurrency in the near term.

Stockton further explained that in the coming weeks, Bitcoin could fall to a support level of around $84,500, which means a drop of over 10% from its current level. She also added that if the price of Bitcoin continues to decline, the next support level might be around $73,800, representing a drop of about 22% from the current level.

Stockton pointed out that Bitcoin fell below the 50-day moving average last week. In her latest report to clients, she wrote that this confirms medium-term overbought and sell signals, supporting a price correction in the first quarter of 2025.

"Short-term momentum is now negative per the daily MACD and the 20-day MA, which supports a move to a short-term bearish bias," Stockton said. She was referring to the daily moving average convergence/divergence and the 20-day moving average, which are two other indicators reflecting short-term pricing trends.

Despite the potential short-term weakness, Stockton remains bullish on Bitcoin's long-term outlook and pointed to several positive monthly indicators.

She added, "Both the monthly stochastics and MACD continue to support a bullish long-term outlook going into the new year, so I would view a correction as an opportunity to add exposure to Bitcoin."

In fact, Stockton is not the only one optimistic about Bitcoin's prospects for the new year. For instance, James Butterfill, head of research at cryptocurrency-focused asset management firm CoinShares, said he believes Bitcoin's price will be in the range of $80,000 to $150,000 in 2025.

Alex Thorn, head of research at cryptocurrency-focused asset management firm Galaxy Digital, expects Bitcoin to break through $150,000 in the first half of the year and reach $185,000 by the fourth quarter. Furthermore, Elitsa Taskova, Chief Product Officer at crypto lending platform Nexo, predicts that Bitcoin will more than double within a year to reach $250,000.

She even believes that in the long term, such as over the next decade, she sees the market value of the entire crypto market surpassing that of gold.

Additionally, so far this year, stocks related to cryptocurrencies, such as Coinbase and Robinhood, have also surged by 45% and 204%, respectively.