The recent post-election rally in Bitcoin appears to be losing steam, with one prominent technical analyst warning of an imminent correction that could last several weeks. Katie Stockton, founder of independent research firm Fairlead Strategies, has issued a cautionary outlook, suggesting that Bitcoin may be heading for a decline of at least 10% in the coming days.
According to Stockton, Bitcoin could drop to a key support level around $84,500—a fall of more than 10% from current prices. If downward pressure continues, she identifies a secondary support zone near $73,800, which would represent a roughly 22% drop from today’s valuation.
This potential downturn follows Bitcoin’s recent breach below the 50-day moving average—a significant technical threshold. In her latest client report, Stockton emphasized that this break confirms both medium-term overbought conditions and a valid sell signal, reinforcing expectations for a price pullback during the first quarter of 2025.
Technical Indicators Signal Short-Term Weakness
Several technical indicators are now aligning to suggest short-term bearish momentum. The daily MACD (Moving Average Convergence Divergence) and the 20-day moving average have both turned negative, signaling weakening upward momentum.
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“Daily MACD and the 20-day moving average both reflect negative short-term momentum, supporting a bearish near-term bias,” Stockton explained. These metrics are widely used by traders to assess trend strength and potential reversals, making their current alignment particularly noteworthy.
The breakdown below the 50-day moving average is often interpreted as a shift from bullish to neutral or bearish sentiment, especially when combined with other confirming indicators. For investors monitoring on-chain data and trading volume patterns, this confluence adds credibility to the prediction of a sustained correction.
Why Corrections Are Normal in Bull Markets
While a 10–22% drop might sound alarming, such pullbacks are not uncommon—even during strong bull cycles. Historically, Bitcoin has experienced multiple double-digit corrections within broader upward trends. These retracements often serve to reset overextended valuations and flush out speculative leverage, ultimately laying the foundation for the next leg up.
Market analysts emphasize that volatility is an inherent feature of digital assets. Rather than viewing dips as threats, many seasoned investors treat them as strategic opportunities to accumulate at more favorable prices.
Long-Term Outlook Remains Bullish
Despite the anticipated near-term weakness, Stockton remains optimistic about Bitcoin’s long-term trajectory. She points to several monthly-level indicators that continue to support a bullish outlook heading into the new year.
“Monthly stochastic and MACD indicators still favor a positive long-term trend,” she noted. “As such, I view any upcoming correction as an opportunity to increase Bitcoin exposure.”
This sentiment is echoed across multiple institutions within the crypto ecosystem.
Institutional Price Targets Point Higher
James Butterfill, Research Head at CoinShares, believes Bitcoin will trade between $80,000 and $150,000 in 2025. His projection reflects growing confidence in Bitcoin’s adoption as both a store of value and a macro hedge against inflation and monetary expansion.
Alex Thorn, Head of Research at Galaxy Digital, is even more bullish. He forecasts that Bitcoin will surpass $150,000 in the first half of the year and reach $185,000 by the fourth quarter. His analysis factors in increasing institutional inflows, regulatory clarity in major markets, and the ongoing impact of the halving cycle.
Elitsa Taskova, Chief Product Officer at Nexo, goes further—predicting that Bitcoin could more than double within a year to hit $250,000. She also envisions a future where the total market capitalization of the crypto sector exceeds that of gold over the next decade.
These projections underscore a broad consensus: while short-term fluctuations are inevitable, the long-term fundamentals of Bitcoin continue to strengthen.
Broader Market Momentum Supports Confidence
Beyond Bitcoin itself, momentum is building across the broader digital asset ecosystem. Publicly traded companies tied to crypto have seen dramatic gains so far this year:
- Coinbase shares have surged approximately 45%
- Robinhood has posted an eye-popping 204% increase
These gains reflect heightened retail and institutional interest in blockchain-based financial services. Rising trading volumes, expanding product offerings (such as spot ETFs), and improved regulatory frameworks are contributing to increased investor confidence.
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What Should Investors Do Now?
Given the mixed signals—bearish in the short term but strongly bullish over the medium to long term—investors face a strategic decision.
Those focused on long-term wealth preservation may consider using the expected dip as a buying opportunity. Dollar-cost averaging (DCA) into Bitcoin during periods of consolidation can reduce entry risk and improve overall cost basis.
Conversely, traders with shorter time horizons should prepare for increased volatility. Setting stop-loss levels, securing profits from prior gains, and avoiding excessive leverage can help preserve capital during uncertain phases.
Key Levels to Watch
- First Support: $84,500
- Second Support: $73,800
- Upside Target (2025): $150,000–$250,000 range
Monitoring these levels can provide valuable insights into whether the current move is a healthy correction or the start of a deeper reversal.
Frequently Asked Questions (FAQ)
Q: Why is Bitcoin expected to drop 10%?
A: Technical indicators such as the break below the 50-day moving average, negative daily MACD, and overbought conditions suggest short-term downside pressure. Analysts interpret these signals as signs of an impending correction.
Q: Is this sell-off a sign that the bull run is over?
A: Not necessarily. Market corrections are common even in strong bull markets. Many experts believe this dip could be a healthy reset before further gains later in 2025.
Q: Should I sell my Bitcoin now?
A: That depends on your investment goals. Long-term holders may choose to hold or buy more during dips. Short-term traders might take partial profits or tighten risk controls.
Q: What factors support higher prices in 2025?
A: Institutional adoption, spot ETF inflows, macroeconomic uncertainty, and historical post-halving performance all contribute to bullish expectations for Bitcoin in 2025.
Q: How can I protect my portfolio during volatile periods?
A: Consider strategies like dollar-cost averaging, portfolio diversification, using stop-loss orders, and avoiding over-leveraging during uncertain market conditions.
Q: Can Bitcoin really reach $250,000?
A: While speculative, some analysts believe rising demand from institutions and limited supply (due to halving events) could drive Bitcoin toward six-figure prices in 2025.
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Final Thoughts
While Bitcoin may be entering a period of short-term weakness, the underlying momentum remains robust. Technical analysis suggests a possible 10–22% correction in the weeks ahead, but long-term indicators continue to flash green.
For informed investors, volatility isn’t a reason to exit—it’s an invitation to reassess and potentially reposition. As history has shown, some of the best entry points come during moments of fear and uncertainty.
By understanding key technical levels, staying aligned with macro trends, and maintaining discipline in strategy execution, market participants can navigate this phase with clarity and confidence.
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