After an impressive eight-week rally, propelling Bitcoin (BTC) from $27,200 to over $44,000, the cryptocurrency is now facing a possible massive correction.
That’s according to analyst Justin Bennett. The “Daily Price Action” host expressed concern about Bitcoin’s current state, emphasizing the significance of staying above $43,300.
Meanwhile, rising network fees and debates over Bitcoin Ordinals and BRC-20 tokens add complexity to the crypto landscape.
Bitcoin is on the verge of correction
In a recent post on X, Bennett points out a less optimistic outlook for Bitcoin, stating that the BTC price is not looking good below $43,300.
A possible lower high forming and starting to weigh on the trend line support. The next stop is $38,000 on a sustained break.” He highlights the dollar firming up above the 102 support, suggesting potential risk-off scenarios if this trend continues.
As the price surges, network fees rise, triggering a renewed debate over Ordinals and BRC-20 tokens. Bitcoin Core developer Luke Dashjr aims to address this by closing a loophole allowing blockchain spamming.
Dashjr’s efforts have divided the crypto community, with some skeptical miners supporting the proposed changes. However, Dashjr remains steadfast, dismissing Bitcoin-based NFTs as “fraud.”
Bitcoin (BTC) witnessing rising fees
In the same vein, the Bitcoin mempool is currently battling severe congestion, with the number of unconfirmed transactions recently rising above 249,000. The surge in Ordinals inscriptions contributes to this congestion, as they represent over 50% of the daily transactions on the network.
On-chain fees have been on the rise, reaching an average of $27.55 per transaction on Dec. 6.
Glassnode’s lead analyst, “Checkmate,” underscores the discontent caused by inscriptions, making up 50% of daily transactions but less than 10% of block data.
BTC price analysis and forecasts
As of now, the price of Bitcoin stands at $41,700, reflecting a 5% decline in the past seven days, according to CoinGecko.
Bitget Research has provided insights into macro and micro trends, predicting a promising outlook for BTC in 2024.
Chief analyst Ryan Lee envisions potential appreciation for BTC and ORDI, with opportunities for growth in the Bitcoin NFT market and the Lightning Network supporting broader payment adoption.
Also, industry figures like Mike Novogratz, Founder of Galaxy Digital, and Bitget Research’s Ryan Lee offer contrasting perspectives on Bitcoin’s future.
Novogratz suggests a $70,000 BTC value if spot Bitcoin ETFs gain SEC approval, while Lee anticipates BTC reaching $100,000 in the next bull market.
Standard Chartered, a British multinational bank, projects a bullish trajectory for BTC, envisioning the cryptocurrency reaching the $100,000 milestone by the close of 2024.
Geoff Kendrick, the Head of Digital Assets Research at Standard Chartered, highlighted this optimistic outlook in an analytical note dated April 2023.
Despite acknowledging lingering uncertainties, Kendrick emphasized the bank’s belief that the path to $100,000 is progressively clearer.
Notably, in July 2023, Standard Chartered reiterated its optimism, doubling down on the forecast and suggesting a potential upward revision to $120,000 by the end of 2024.
The bank’s unwavering confidence in the flagship digital currency reflects a strategic perspective navigating beyond what was termed the “crypto winter,” underlining a newfound optimism in the cryptocurrency space.
What’s next
The crypto sector eagerly awaits to see whether U.S. regulators will OK a physically-backed Bitcoin ETF.
The U.S. Securities and Exchange Commission will, by Jan. 10, be required to either accept or deny an application from various asset managers.
Cathie Wood’s ARK Investment and 21Shares are expected to be the first of the applicants to get reviewed. The others include BlackRock, Wisdom Tree Funds, Invesco, Galaxy Digital, Valkyrie Funds, and Bitwise.
Whether an ETF will live up to investor hype remains to be seen.