Bitcoin Drops 22% From Record High, Analysts Predict Rebound

David Duong, the Institutional Research Director, has expressed his views on the current state of the cryptocurrency market, particularly focusing on Bitcoin. He believes that the recent selloff in cryptocurrencies is primarily due to macroeconomic concerns and deteriorating liquidity conditions. However, he anticipates that these factors may improve in the next quarter, providing support for asset prices. Duong's analysis suggests that cryptocurrency prices, including Bitcoin, may bottom out in the coming weeks and then rebound to new highs later this year.

Bitcoin's price has seen a significant decline, dropping 22% from its record high of $109,000, which was reached on January 20, 2025. This decline has led to a cautious market sentiment, with hopes of a quick return above $90,000 starting to fade. However, recent technical analysis suggests that Bitcoin could be on the verge of a significant rally. The cryptocurrency's price action has been conforming to a cup-and-handle pattern, which has been forming over multiple years. This pattern suggests that a bullish setup may be taking shape, with the handle support of the pattern serving as a potential rebound point for the price correction.

The cup-and-handle pattern in question has been forming since 2021, with the rounded bottom phase stretching until mid-2024. This prolonged accumulation period saw Bitcoin gradually recover from the bearish market cycle before breaking above its neckline resistance. The breakout started the handle formation in the latter half of 2024, a consolidation phase that set the stage for BTC’s next leg up. By November 2024, Bitcoin completed this handle phase and went on an impressive rally that ultimately resulted in a new all-time high of $108,786 in January 2025.

However, the recent 24% correction from this all-time high has seen the Bitcoin price returning to the neckline resistance of the cup-and-handle formation. The logical next step is for this neckline resistance to serve as support for the price correction, and we could see Bitcoin rebound from here. In terms of a price prediction, Elliott wave analysis and projections put the price target above $130,000, particularly at $139,000.

According to the Elliot Waves technical framework, Bitcoin is currently in a larger fifth impulse wave formation. However, this fifth wave, which is generally bullish, has been punctuated by corrective ABC sub-waves, leading Bitcoin to retest the support of the cup-and-handle formation. Now that the support has been met, Bitcoin is in a position to bounce and continue the formation of its fifth impulse wave. This is expected to bring it to the price target above $130,000.

The alignment of the cup-and-handle formation with Elliott wave projections strengthens the case for a major breakout in the coming months. However, Bitcoin’s fundamentals reflect uncertainty in the short term. There is currently a lack of bullish momentum needed to rechallenge the $90,000 mark, which would be the first step needed to reach $130,000. Steady institutional outflows from Spot Bitcoin ETFs have further increased selling pressure, limiting Bitcoin’s ability to regain strength in the short term.

Analysts have also predicted that cryptocurrency prices could find bottoms in the next few weeks before hitting new highs later this year. Some believe the cryptocurrency could soon reach new all-time highs, despite the broader downturn for the economy. Analysts expect Bitcoin to hit new all-time highs by June 2025, with a rising wedge pattern on the BTC chart suggesting it could be even sooner. The Bitcoin price forecast chart is showing signs of more upside potential after rebounding from the recent low, reaching $83,175 at press time. Analysts see a potential Bitcoin price recovery as BTC holds key levels.