Bitcoin’s pullback after rising ntabove $100,000 creates risk of a 13% correction, chart master says

Bitcoin’s short-lived cross above the key psychological level of $100,000 could set the cryptocurrency up for a corrective sell-off in the near term.

That’s according to Katie Stockton, technical analyst and founder of Fairlead Strategies.

In a Monday note, Stockton highlighted that Bitcoin’s inability to hold above the $100,000 level for more than a few days has left the historic breakout “unconfirmed” and opened the cryptocurrency up to potential weakness in the short term.

“Short-term momentum is weak, and there is a new daily counter-trend signal that supports another couple weeks of digestion before bitcoin resumes its uptrend,” Stockton said.

The counter-trend “sell” signal Stockton is eyeing supports at least two more weeks of consolidation, she said.

The two levels of support investors should watch include the 20-day moving average at $97,233 as of Tuesday morning, as well as the 50-day moving average at $85,342.

If bitcoin fails to hold above its 20-day moving average, Stockton highlighted the 50-day moving average as the next logical level of support for bitcoin to trade toward.

That represents a potential downside of about 13% from current levels, with bitcoin trading at $97,690. If the 50-day moving average fails as support, Stockton highlighted $73,800 as the next likely level for bitcoin to trade to, representing a potential downside of 24%.

“But this level is unlikely to be relevant in the short term,” Stockton said of the lower support level.

Despite the short-term breakdown below $100,000, bitcoin still has bullish momentum on an intermediate- and long-term basis, Stockton said.

That suggests that any corrective action in the token’s price should ultimately be short-lived, with the cryptocurrency’s longer-term uptrend continuing higher as the market heads into 2025.

“Our intermediate-term indicators point higher, supporting a bullish bias beyond the short term. This suggests a severe pullback can be avoided,” Stockton said. “Our long-term indicators shifted higher last month, supporting a bullish bias in 2025.”