Caution: Why Bitcoin is facing a 50% drop soon 
Cryptocurrency Nov 12, 2024 Share
As Bitcoin (BTC) rallies to new highs in the ongoing explosive post-election rally, a critical historical metric hints at a possible near-term correction for the leading digital asset.
In this case, crypto analyst Ali Martinez has offered a cautionary note, stating that retail interest may be fueling a dangerous overvaluation, he said in an X post on November 12.
To illustrate his concern, Martinez pointed to the surging Google search trends for ‘Bitcoin,’ which often coincide with price corrections. This pattern was seen in 2021 when increased public interest led to corrections of 30%, 26%, 27%, and even 50%.
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With Bitcoin nearing the $90,000 mark, search interest is again spiking. Martinez warned that while heightened interest brings in new capital, it often signals a market top.
“Not bearish, just a word of caution. While retail interest in Bitcoin signals further capital inflows, spikes in search trends often align with price drops,” Martinez said.
Bitcoin price analysis chart. Source: TradingView/Ali_charts
More Bitcoin pullback concerns
At the same time, crypto trading analyst Michaël van de Poppe also supported the possibility of a near-term Bitcoin correction in a November 12 post on X. Poppe noted that, with Bitcoin around $90,000, there remains room for a possible pullback.
Despite the impressive rally, he suggested that attention should be paid to a potential 10% correction toward the CME gap before further gains. As he described, this “sweet spot” correction could provide a healthier foundation for Bitcoin’s next upward push.
He also warned that the upcoming U.S. Consumer Price Index (CPI) report could stoke bearish sentiment toward the asset.
Bitcoin price analysis chart. Source: TradingView
In line with the price outlook, as reported by Finbold, trading expert Alan Santana pointed out that Bitcoin has confirmed its bullish bias.
He stated that the momentum is likely sustainable if Bitcoin trades above the $65,000 and $69,000 levels. The focus remains on the $100,000 target, which looks achievable in the current cycle if the bullish elements remain at play.
Indeed, Bitcoin’s rally has seen it target the $90,000 resistance level, inspired by optimism surrounding Donald Trump’s re-election.
Given Trump’s possible influence on digital assets, market players such as BitMEX co-founder and former CEO Arthur Hayes see Bitcoin potentially reaching a $1 million valuation.
“It took $4 trillion to decrease the debt-to-nominal GDP ratio from 132% to 115%. Let’s say the US reduces it further to 70%, which is where the ratio was in September 2008. Just using a linear extrapolation equates to $10.5 trillion of credit that must be created to accomplish this deleveraging. This is how Bitcoin goes to $1 million because prices are set on the margin,” Hayes said.
Bitcoin price analysis
Bitcoin was trading at $85,505 at press time, rallying over 4% in the last 24 hours. On the weekly chart, BTC has surged by over 25%.
Bitcoin seven-day price chart. Source: Finbold
As things stand, Bitcoin is looking to maintain momentum and target the $90,000 mark, provided it stays above the $85,000 support zone. However, concerns about a possible correction cannot be ignored, considering that momentum indicators such as the relative strength index are overbought.
Featured image via Shutterstock
