The recent post-election rally in Bitcoin appears to be losing steam, with one prominent Wall Street strategist warning of an imminent correction that could last several weeks. As momentum shifts and technical indicators flash caution signs, investors are reassessing their positions—while still holding firm on the long-term outlook.
Short-Term Bearish Signals Emerge
Katie Stockton, founder of independent research firm Fairlead Strategies, has issued a warning that Bitcoin could drop by at least 10% in the coming weeks. Her analysis points to weakening momentum and key technical breakdowns that suggest a near-term downturn.
According to Stockton, Bitcoin may fall to a support level around $84,500**, representing a decline of more than 10% from current prices. Should the downward pressure persist, she identifies a secondary support zone near **$73,800, which would mark a roughly 22% drop from today’s valuation.
One of the most telling signs, Stockton notes, is Bitcoin’s recent breach below the 50-day moving average—a significant milestone for technical traders. In her latest client report, she emphasized that this move confirms mid-term overbought conditions and strengthens the case for a price correction in early 2025.
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She further explained:
“Daily MACD (Moving Average Convergence Divergence) and the 20-day moving average both show negative short-term momentum, supporting a bearish near-term bias.”
These indicators are widely used to assess trend strength and potential reversals. When combined, they suggest that selling pressure may dominate in the short run.
Why This Correction Makes Sense
Market corrections are not uncommon—even in strong bull markets. After a sustained rally driven by macroeconomic optimism, regulatory clarity, and growing institutional adoption, a pullback helps reset investor sentiment and flush out speculative excess.
Stockton emphasizes that such a correction doesn’t negate the broader bullish narrative. Instead, it aligns with typical market behavior following periods of rapid appreciation.
Key Technical Indicators at a Glance:
- Daily MACD: Negative crossover indicates weakening upward momentum.
- 50-Day Moving Average: Breakdown confirms shift from short-term bullish to neutral or bearish.
- 20-Day Moving Average: Price now trading below this level reinforces downside risk.
While these signals point to weakness in the immediate term, they also set the stage for healthier long-term growth—if fundamentals remain intact.
Long-Term Outlook Remains Strong
Despite the predicted short-term slump, Stockton remains confident in Bitcoin’s trajectory over the coming months and years. She highlights several positive monthly indicators that continue to support a bullish long-term view.
“Monthly stochastic and MACD indicators still favor a strong upward trend heading into the new year. I see this pullback as an opportunity to increase Bitcoin exposure,” Stockton said.
This sentiment is echoed across the crypto investment community.
Industry Leaders Weigh In on Bitcoin’s Future
- James Butterfill, Head of Research at CoinShares, forecasts Bitcoin will trade between $80,000 and $150,000 in 2025, citing increased ETF inflows and halving-driven scarcity.
- Alex Thorn, Head of Research at Galaxy Digital, expects Bitcoin to surpass $150,000 in the first half of 2025** and reach **$185,000 by year-end.
Elitsa Taskova, Chief Product Officer at Nexo, goes even further:
“Bitcoin will more than double within a year, reaching $250,000.”
Taskova also believes that over the next decade, the total market capitalization of cryptocurrencies could exceed that of gold—a bold claim underscoring the transformative potential many see in digital assets.
Broader Market Momentum Supports Optimism
Even as Bitcoin faces short-term headwinds, related markets are showing robust strength. Equity performance among crypto-linked companies reflects growing confidence:
- Coinbase shares are up 45% year-to-date
- Robinhood has surged an astonishing 204% since the start of 2025
These gains suggest strong underlying demand and increasing integration of digital assets into mainstream finance.
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What This Means for Investors
For active traders, the current environment calls for caution. Tightening risk management, setting stop-loss levels, and avoiding over-leverage can help protect capital during volatile periods.
For long-term holders, however, this may represent a strategic entry point. Historically, corrections following major rallies have often preceded new all-time highs—especially when supported by strong fundamentals like those seen today.
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Frequently Asked Questions (FAQ)
Q: Why is Bitcoin expected to drop 10%?
A: Technical indicators such as the breakdown below the 50-day moving average, negative MACD momentum, and overbought conditions suggest short-term weakness. These factors collectively point to a likely correction of at least 10%.
Q: Is this sell-off a sign of a larger crash?
A: Not necessarily. Market corrections are normal after strong rallies. The fundamentals—such as ETF approvals, institutional interest, and supply scarcity—remain strong, suggesting this is a healthy pullback rather than the start of a bear market.
Q: Should I sell my Bitcoin now?
A: That depends on your investment horizon. Short-term traders might consider taking profits or hedging exposure. Long-term investors may view this as an opportunity to buy at lower prices or average down.
Q: What happens if Bitcoin drops below $73,800?
A: A break below $73,800 would signal deeper bearish momentum and could trigger further selling. However, such a level hasn’t been tested yet, and strong buying interest typically emerges well before major support zones are breached.
Q: Can Bitcoin still reach $250,000?
A: While speculative, predictions like Elitsa Taskova’s $250K target are based on accelerating adoption, limited supply post-halving, and growing macroeconomic uncertainty driving demand for hard assets.
Q: How reliable are technical analysts like Katie Stockton?
A: Stockton has a proven track record in market timing and technical strategy. While no forecast is guaranteed, her methodology is grounded in widely accepted technical principles used by institutional investors.
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Final Thoughts
While a short-term correction appears increasingly likely—with potential drops of 10% or more—Bitcoin’s long-term fundamentals remain intact. Seasoned investors understand that volatility is part of the journey. By staying informed and maintaining disciplined strategies, both traders and holders can navigate these fluctuations with confidence.
As history has shown time and again, periods of fear often precede some of the most rewarding opportunities in the crypto market.