Bitcoin is showing signs of entering a critical phase in its current market cycle, with analysts warning it may be approaching the largest price correction seen during this bull run. As volatility increases and macroeconomic signals shift, investors are closely watching key technical levels and external factors that could determine the next major move.
According to Julio Moreno, Research Head at CryptoQuant, Bitcoin has declined by 26.62% from its all-time high of $109,500. While this pullback is significant, it still falls short of the severe drawdowns witnessed in previous bear markets—such as the 83% drop in 2018 and the 73% correction in 2022. This suggests that while sentiment has cooled, the current downturn hasn’t yet reached panic levels typical of full-blown bear phases.
However, emerging data paints a cautious picture for near-term recovery.
Market Sentiment and Technical Indicators
On a weekly chart, Bitcoin recently tested the 50-week exponential moving average (EMA) for the first time since September 2024. Historically, a weekly close below this level has often signaled the beginning of a bearish phase. While not definitive on its own, this development adds weight to growing concerns about momentum loss.
The weekly Relative Strength Index (RSI) has dropped to 43—the lowest since January 2023. In prior cycles, similar RSI readings in 2023 and late 2024 were followed by strong rebounds. However, when RSI fell below 40 in 2022, it marked a period of sustained downward pressure as sellers took control.
Rekt Capital, a well-known anonymous trader, analyzed the daily RSI trend and projected that the current correction may find support between $67,000 and $70,000. This zone aligns with both historical resistance turned support and significant on-chain liquidity pools.
Another key level to watch is $74,000—the previous all-time high set earlier in 2024. But more technically significant may be the daily demand zone between $65,000 and $69,000. Notably, $69,000 was Bitcoin’s peak price in 2021, making it a psychologically important threshold for long-term holders.
Macro Factors Influencing Bitcoin’s Path
Bitcoin does not trade in isolation. Analysts at ecoinometrics highlight a strong historical correlation between Bitcoin performance and the Nasdaq-100 Index. When Nasdaq-100 returns fall below their long-term year-over-year average, Bitcoin’s growth tends to stall, increasing vulnerability to deeper corrections.
Currently, the Nasdaq-100 is flat on a year-over-year basis. Even if Bitcoin stabilizes, this macro backdrop could limit upside potential and delay any meaningful rally.
Michael Saylor’s strategy at MicroStrategy also appears under pressure. The company paused its Bitcoin accumulation between March 31 and April 6, marking a shift from its aggressive buying stance. Strategytracker data reveals that MicroStrategy has invested approximately $35.65 billion in Bitcoin over five years, yielding a modest return of just 17%. While still holding a massive position, the slowdown in purchases may affect market sentiment, especially during periods of uncertainty.
Regulatory Shifts in the U.S.
In a major policy shift, the U.S. Department of Justice (DOJ) has disbanded its National Cryptocurrency Enforcement Team (NCET), according to internal memos reviewed by Fortune. Deputy Attorney General Todd Blanche stated that the DOJ is not a digital asset regulator and criticized prior administrations for using prosecutions as a form of "regulation by enforcement."
This move aligns with President Trump’s January executive order aimed at creating clearer regulatory frameworks for digital assets. Under the new directive, prosecutors are instructed to focus on fraudsters who harm investors rather than targeting compliant exchanges, crypto mixers like Tornado Cash, or offline wallet users.
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This regulatory pivot could reduce legal overhangs on the industry and potentially pave the way for institutional participation—a bullish signal if sustained.
Global Market Reactions and Fraud Alerts
Meanwhile, misinformation continues to impact markets. A false report claiming former President Trump was considering pausing tariffs triggered a 9% surge in major cryptocurrencies and caused South Korea’s daily trading volume to spike nearly 400%, reaching $458 million across five major exchanges on April 7.
Such volatility underscores the fragility of sentiment in retail-driven markets and highlights the risks posed by unverified news.
In Australia, the Australian Securities and Investments Commission (ASIC) secured a federal court order to shut down 95 companies linked to investment scams and "pig-butchering" frauds—complex schemes involving fake identities and cloned trading platforms. These operations spanned digital assets, forex, and commodities. ASIC likened these scams to a hydra: “For every one we shut down, two more emerge.” The agency removes over 130 scam websites weekly and urges public vigilance against online fraud.
Innovation Amid Market Uncertainty
Despite macro headwinds, innovation in adjacent tech sectors remains robust. AI video startup Runway raised $308 million in a new funding round led by General Atlantic, with participation from Nvidia and SoftBank Vision Fund II. The company now boasts a $3 billion valuation.
Runway’s Gen-4 model enables consistent character and scene rendering in AI-generated videos—a breakthrough for creative industries. Its tools have already been used in Amazon series, Madonna’s tour visuals, and Puma advertising campaigns. This convergence of AI and digital creation reflects broader technological momentum that may indirectly benefit blockchain ecosystems through increased demand for decentralized compute and content verification.
Frequently Asked Questions (FAQ)
Q: What is a price pullback in Bitcoin?
A: A pullback refers to a temporary decline in price after a significant upward move. It's common in bull markets and often presents buying opportunities before further gains.
Q: Is a 26% drop considered a crash?
A: No. While notable, a 26% correction is moderate compared to past crashes exceeding 70%. It reflects normal market volatility rather than systemic collapse.
Q: How do moving averages help predict Bitcoin trends?
A: The 50-week EMA acts as a long-term trend indicator. A sustained break below it can signal weakening momentum and potential bearish continuation.
Q: Why is the Nasdaq-100 linked to Bitcoin performance?
A: Both assets are sensitive to interest rates and risk appetite. When tech stocks weaken, capital often exits high-growth assets like Bitcoin.
Q: Can regulatory changes boost Bitcoin’s price?
A: Yes. Clearer rules reduce uncertainty, encourage institutional investment, and improve market stability—key drivers for long-term price appreciation.
Q: What should investors watch during this correction?
A: Key levels include $65K–$69K (demand zone), weekly RSI trends, institutional accumulation patterns, and macro signals like Fed policy and equity market performance.
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