Bitcoin may face a correction in two to three months, according to Jamie Coutts, chief analyst at Real Vision, who cited a macro model he developed.
Bitcoin has hit new ATHs in the face of a deteriorating liquidity backdrop.
1. If conditions worsen, the rally, while euphoric, can only last for a limited time.
2. If conditions ease from here, then a pullback is warranted, but then off we go again.Remember, I am very… pic.twitter.com/KOclmmsNjQ
— Jamie Coutts CMT (@Jamie1Coutts) December 5, 2024
The expert compared the dynamics of the leading cryptocurrency with global liquidity, noting a two to three-month lag in the reaction of digital gold to changes in the latter metric.
According to him, bitcoin is “lagging” and may continue its bull run, but in the next three months, conditions for a pause in the rally and risks of “pain” will emerge:
“If conditions worsen, the bull market, despite the euphoria, can only last for a limited time. If they improve, then a pullback is warranted, but then we move forward again.”
Coutts noted that the model helped define the parameters of the last bear market in 2022. In October, the indicator turned negative again, but Trump’s victory in the US presidential election triggered a strong rally.
“The panel shows a clearly sustained downward momentum across most indicators. This is not a reason to panic, but a warning. Under such conditions, bitcoin shows the lowest returns,” he emphasized.
Earlier, Rachel Lucas from BTC Markets explained the price drop from December 5 to 6 as a “leverage unwinding,” which triggered stop-losses and forced position closures.
On-chain analysts determined that on this day, BlackRock and MARA Holdings acquired 7750 BTC and 1423 BTC respectively, while an unknown whale purchased 600 BTC amid the decline in the leading cryptocurrency’s price to $90,500.
Previously, CryptoQuant specialists recorded an increase in demand from retail investors to the highest level since 2020. This surge explains bitcoin’s resilience amid hodlers beginning to take profits.