Summary My initial bullish thesis for Bitcoin reaching $117,000 was based on Trump's potential crypto presidency and bullish chart patterns, but it fell short. Despite Bitcoin reaching all-time highs above $109,000, recent trend failures and a drop below $80,000 necessitate reassessing portfolio positions for potential further downside. Indicators like Standard Deviation channels and MACD suggest more room for Bitcoin to fall before reaching oversold territory, prompting a rating reduction. While intermediate-term charts show potential for a reversal, I maintain a "buy" rating but caution against large positions due to rising volatility. When I last covered Bitcoin ( BTC-USD ), on October 20th, 2024 with my article “Bitcoin: The Path To $117,000”, the king of cryptocurrency was heading toward major long-term resistance levels near $73,900 (price regions marking the historical highs from early March 2024). In the article, I presented an incredibly bullish argument which suggested that BTC-USD prices had the potential to generate gains of nearly 70% in reaching my $117,000 price target. Now, I think it is important to present some chronological context first because the market had not yet crossed the massive psychological target of $100,000. Of course, this is important because many cryptocurrency thought leaders have been proposing this six-digit figure as a potential yearly price target for quite a long time. As one example, Tom Lee expected to see BTC-USD reach $100,000 before the end of 2021 , and it should be quite obvious that this prediction was not even close to the reality of the situation. BTC-USD prices actually fell below $17,000 before the end of 2022, so it’s clear that many of the most influential cryptocurrency influencers did not even have the direction correct in the early 2020s. Bitcoin's Prior Inability to Overcome $100k (Income Generator via Trading View) My prior suggestion in October 2024 that BTC-USD finally had the potential to actually break through $100,000 was based on two assumptions. First, I believed that Donald Trump had a very strong chance of winning the U.S. Presidency due to his long history of underperformance in national polling data and his suggestions on the 2024 campaign trail which suggested that he planned to focus on creating a “ strategic Bitcoin stockpile ” in the United States. The second component of my bullish thesis was technical in nature because the long-term BTC-USD price history was generating heavily bullish chart patterns. Specifically, the formation of a Bull Flag pattern began once BTC-USD crypto prices began to rally from prices just south of $25,000. Bitcoin: Bull Flag Pattern Signals Major Breakout (Income Generator via Trading View) Now, for full disclosure, I should mention that the Bull Flag is a price pattern that has been met with strong skepticism in some of my prior analysis articles. For example, a similar price structure was visible in the Nvidia Corp. ( NVDA ) chart history in April 2024. In that case, most reader skepticism was based on the fact that Nvidia stock had already seen a substantial rally and many of the comments suggested that a downside pullback seemed more likely. However, my projected price target turned out to be incredibly accurate (just $2.35 from the June 20th, 2024 highs). In my view, what is most important to remember here is the fact that these types of price patterns should offer a rough guide of the trend activity an asset is most likely to encounter over a given timeframe, rather than an exact (or “crystal ball”) type of prediction that is expected to reach a specific price level. Bitcoin: Bull Flag Breakout Materializes (Income Generator via Trading View) Unfortunately, my recent projections for BTC-USD have fallen short by a much wider margin. To be fair, the widespread breakout that occurred after Donald Trump won the U.S. Presidential election and becoming the “ first cryptocurrency President ” did send BTC-USD prices above the coveted $100,000 mark. Moreover, this rally ultimately produced all-time highs above $109,000 in January 2025. But while the expectations calling for a massive impulse wave in the upward direction did actually come to fruition, the price levels themselves disappointed (failing to reach the $117,000 price target). For these reasons, it is clear that I miscalculated the level of momentum that was likely to be generated by all of these positive events. Recent Declines Haven't Breached -2 Standard Deviation (Income Generator via Trading View) Now that we have seen significant trend failures at these elevated levels and BTC-USD prices have fallen back below $80,000, it is critically important for cryptocurrency investors to assess the extent of the recent damage and position their portfolios based on the possibility for further downside. When I read through many recent analysis commentaries suggesting that the recent drop in BTC-USD actually represents a buying opportunity, I feel as though I must stress the point that crypto prices have not fallen as far as many bulls seem to think. To visualize this point, I will use the Standard Deviation channels that are currently shown in the weekly timeframe. Here, we can see that this roughly $40,000 drop has only placed BTC-USD within close proximity to the -1 Standard Deviation on this longer-term time frame. Essentially, this tells us that prices could fall below $70,000 before breaching the -2 Standard Deviation. Additionally, momentum indicator readings in the Moving Average Convergence Divergence (MACD) are only now starting to roll over out of overbought territory. Unfortunately, this tells us that BTC-USD prices still have a large amount of room to extend to the downside before we start to reach oversold territory. Bitcoin: Critical Support Levels Broken (Income Generator via Trading View) If we pair this information with the fact that critical support zones near $90,900 have broken forcefully and BTC-USD prices themselves have fallen far below the 200-day exponential moving average, we can see that my prior “strong buy” rating no longer seems appropriate. In addition to this, I wonder about the possibility that many inexperienced cryptocurrency investors might have purchased this asset at elevated levels (when all of the hype surrounding crypto reached a fever pitch in early 2025). If this is the case, there is still a strong possibility that some of these traders might face margin calls or simply panic to such an extent that they close their new long positions and exacerbate the bearish trends that are already building. Bitcoin: Harmonic Patterns Suggest Possible Reversal (Income Generator via Trading View) Last, I will point out some of the positive factors that can be found on the intermediate-term timeframes. On the 4-hour charts, we can see two different Harmonic Patterns that have formed as BTC-USD prices fell below the -2 Standard Deviation. Furthermore, indicator readings in the MACD are currently moving out of oversold territory and are on the verge of crossing over the zero-line. Of course, this is interesting because it provides a bit of a contrast with a more clearly bearish scenario that can be seen on the weekly charts. In some sense, the argument can be made that this activity indicates a potential reversal from these lower price regions, and this is why I am still maintaining a “buy” rating for this cryptocurrency. However, in order for me to further revise this stance to a “hold” or even a “sell” rating, I would need to see BTC-USD prices fall below $73,800. Unfortunately, a downside breach of this level would invalidate both of the bullish Harmonic Patterns that have formed on the intermediate timeframes, and this would suggest that further downside extension cannot be ruled out. As a result of all of these events, I feel obligated to reduce my “strong buy” rating, but I am not yet ready to turn bearish on this cryptocurrency because there are still bullish arguments suggesting upside reversals might still be possible. Overall, I think that the likelihood of rising volatility for this asset is a factor that might punish newer investors that purchased BTC-USD at elevated levels. In my view, this means that recent trend activity offers an important lesson showing why cryptocurrency positions should still be kept relatively small within a broader investment portfolio.
