Bitcoin Looks Poised to Drop as Much as 25% Thanks to Technical Signals, Fairlead's Katie Stockton Says

Bitcoin looks poised for a double-digit drop thanks to technical signals that suggest the coin has been "overbought" in its latest run-up, Fairlead Strategies' Katie Stockton said.

Bitcoin is likely to experience a double-digit decline, according to technical signals that indicate the coin has been "overbought" in its latest rally, Fairlead Strategies' Katie Stockton said.

In a note to clients on Tuesday, Stockton, a top technical analyst, said she anticipates further near-term weakness for the premier cryptocurrency, despite the token reclaiming the $100,000 level.

She predicts that Bitcoin appears poised to find support around the $84,500 mark, implying another 13% drop from current levels in its next sell-off.

Bitcoin could find secondary support at the $73,800 level, she added, suggesting that the coin could decline as much as 25% if the sell-off is steeper than anticipated.

"Bitcoin has a rebound underway, but we expect it to fade quickly, yielding a lower high relative to the December peak," Stockton said. "The weekly stochastics have an active overbought downturn, and the daily stochastics are newly overbought, so we think further upside will be limited in the near term."

However, Stockton noted that she remains bullish on bitcoin over the long term, highlighting a strong backdrop that could sustain the crypto through 2025.

Bitcoin has experienced a turbulent ride since the presidential election, with bullish sentiment rising as crypto traders anticipate lower interest rates and a more favorable environment for crypto under the new administration. Perhaps the most bullish development has been the possibility of a bitcoin national reserve under Trump, which would involve the US government purchasing and holding bitcoin as a strategic asset.

The coin has seesawed this week. It rallied sharply on Monday, briefly surpassing the $100,000 threshold, but it retreated 4% on Tuesday as selling pressure resumed. It was trading around $97,000 at 12:45 p.m. on Tuesday.