Here's Why Bitcoin (BTC) Could Drop 8% to $101,000 Before Reaching a New High
Bitcoin price is recovering from a recent drop that temporarily shook investor confidence. Trading above key support, the coin continues to strengthen its long-term uptrend
However, historical data shows that BTC may correct slightly first before reaching a new all-time high (ATH).
Bitcoin must fall in order to rise
Bitcoin’s path to a new record may require an 8.7% decline in the coming days. The $101,634 level contains the 38.2% Fibonacci retracement line, which has historically served as a starting point. Each bounce from this level in previous rallies has caused a sharp rise in the price of BTC.
A similar situation could be forming now. If Bitcoin pulls back to this important level, it could set the stage for another strong rally. Historically, such moves have helped reset market momentum and set the stage for sustained gains, potentially taking BTC beyond its current highs.
Bitcoin's Historical Support Level. Source: TradingView
Broad momentum calls for caution. The network value to transactions (NVT) ratio, a commonly used valuation measure that shows whether Bitcoin is overvalued relative to on-chain activity, is declining. Typically, a rise in NVT coincides with overheated conditions and precedes a price drop. A cooling in the indicator indicates subdued activity.
This dynamic reduces the likelihood of a sharp decline, making it difficult for BTC to reach a Fibonacci retracement level. Without a pullback, the historical scenario may not unfold as expected, which could delay Bitcoin's move to a new ATH.
Bitcoin NVT Signal. Source: Glassnode
BTC Price May Continue to Rise
At the time of writing, Bitcoin is trading at $111,340, holding steady above the $110,000 support. This resilience is strengthening the four-month uptrend and signals potential short-term gains. The momentum is continuing, and BTC is targeting higher levels.
If the trend continues, Bitcoin could rise above $112,500 and head towards $115,000. However, to reach a new all-time high, BTC may first fall to $101,634, setting the stage for a stronger breakout.
Bitcoin Price Analysis. Source: TradingView
If profit taking intensifies, BTC could fall to the correction level faster. However, if fear-driven selling takes over, the price risks falling below $100,000, which would cancel the bullish outlook and prolong the correction phase.
Source: cryptonews.net
