Real threat or exaggeration?: Bitcoin faces correction signals as some talk about an 80% drop

The crypto community is divided between technical signals suggesting strength and warnings about imminent market risks. Michael van de Poppe has revealed data that could change the perspective on Bitcoin’s upcoming movements.

Gold appears overvalued compared to Bitcoin: Is it time for a shift?

According to market analyst van de Poppe, Bitcoin shows an extraordinarily low valuation level compared to gold. The RSI (Relative Strength Index) indicator between BTC and gold has fallen below the 30 threshold, something that has only happened four times in Bitcoin’s entire history.

What’s interesting is that the previous three occasions coincided exactly with the main market lows:

• 2015: Marks the end of the previous bear market
• 2018: Crucial inflection point of the cycle
• 2022: Last major support level detected

Van de Poppe emphasizes that although it’s not an infallible guarantee, the current imbalance between the two assets is too evident to ignore. There is consensus that gold could be overvalued relative to Bitcoin, which could trigger a significant flow shift toward cryptocurrencies.

Price action and critical levels to watch

Bitcoin rejected near $90,000 and subsequently fell along with other markets (gold and stocks like the Nasdaq). With the current price at $91.55K, according to van de Poppe, staying above $88,000 would be a sign of sustained recovery.

If weakness persists, traders should watch:

• Support at $83,800
• Lower resistance at $80,500

The macroeconomic context complicates the outlook: US employment data, inflation reports, and an expected rate hike by the Bank of Japan could pressure BTC in the short term. Historically, Bitcoin has reacted negatively after rate increases in Japan.

Spot market indicators show relative weakness

Glassnode reports that Bitcoin’s 14-day RSI has returned to neutral territory. Market signals have deteriorated: the accumulated volume delta turned negative while trading volume fell to historic lows. Open interest in futures also decreased slightly.

Bullish positions still exist but could become fragile if prices continue to decline.

The 80% drop theory: Is history repeating itself?

Veteran trader Peter Brandt issued a warning that resonated in the markets: Bitcoin has broken its parabolic trendline. In previous cycles, similar breakages resulted in declines of up to 80% from all-time highs.

With Bitcoin currently about 20% below its $126.08K high, an 80% correction would imply a fall to approximately $25,240. Brandt notes that these movements typically occur in environments of more restrictive global financial conditions.

However, the current landscape presents crucial differences from previous cycles. The composition of holders has changed dramatically: institutions now control a much larger portion of the supply. Corporate holdings grew from 197,000 BTC at the beginning of 2023 to over 1.08 million BTC today — a 448% increase.

This change in ownership structure could act as a buffer against extreme drops, according to researcher Axel Adler Jr., who points out that Bitcoin is in a correction phase after three years of continuous expansion. Long-term institutional presence would likely limit the magnitude of any severe adjustment.