Overbought Bitcoin Is Vulnerable To A 13% Sell-off, Top Technical Analyst Says

Bitcoin looks set for another 13% drawdown over the near term, according to Katie Stockton.

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• Investors should brace for a potential double-digit drop in bitcoin, according to Katie Stockton.
• The top technical analyst said she saw bitcoin finding support at $84,500, implying 13% downside.
• Bitcoin's secondary support could be around $73,800, implying g 25% downside in a steeper sell-off.

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.

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

Stockton predicted that Bitcoin looks on track 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, implying that the coin could drop 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."

Still, Stockton said she remains bullish on bitcoin over the long run, pointing to a strong long-term backdrop that could support the crypto throughout 2025.

Bitcoin has been on a roller coaster ride since the presidential election, with bullish sentiment ramping up as crypto traders eye lower interest rates and a friendlier environment for crypto under the new administration. Perhaps the most bullish development has been the potential for a bitcoin national reserve under Trump, which would see the US government buy and hold bitcoin as a strategic asset.

The coin has whipsawed this week. It sharply rallied on Monday, 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.