As a seasoned analyst with over two decades of experience in financial markets, I must say that the current state of Bitcoin is reminiscent of a rollercoaster ride – exhilarating and nerve-wracking at the same time. The latest on-chain data and technical indicators suggest that we might be headed for a steep correction, potentially dipping below $80,000.
Investors in Bitcoin have been eagerly anticipating a surge to the $100,000 mark since bulls have managed to keep BTC above $90,000 on a weekly basis. Nevertheless, recent data and indicators from the blockchain suggest that Bitcoin’s price might experience a significant drop of around 10-15%, which could cause it to dip down to approximately $76,000 first before another potential rally towards $100,000 occurs. This predicted correction aligns with technical chart patterns as well.
Bitcoin Price Heading for a Steep Correction?
According to well-known cryptocurrency analyst Ali Martinez, there are five indicators on the Bitcoin blockchain that point towards a possible sharp price drop. These signs could potentially cause the price to fall below $80,000.
1. Bitcoin Fear and Greed Index In “Extreme Greed”
The Bitcoin fear and greed index highlights the market sentiment on a scale of 1-100 with close to 100 being the condition of extreme greed and close to 1 being extreme fear. Currently, the score is 83/100 which shows a condition of extreme greed and caution ahead.
Bitcoin Fear and Greed Index is 83 ~ Extreme Greed
Current price: $89,882— Bitcoin Fear and Greed Index (@BitcoinFear) November 18, 2024
According to analyst Ali Martinez, there’s been an increase in people searching for Bitcoin on Google, indicating that the desire for profit (greed) has spread among retail investors.
2. Profit Booking By Investors After Bitcoin Price Rally
Analyst Martinez pointed out that during the latest surge in Bitcoin prices, investors have pocketed approximately $5.42 billion in gains. This spike in profits happened at the same time as a substantial rise in the sell-side risk ratio, which currently stands at 0.524%. Higher sell-side risk ratios typically indicate increased selling activity, possibly leading to more market turbulence. Therefore, given the growing tendency for profit-taking, Martinez advises investors to exercise caution going forward.
3. TD Sequential Indicator Flashes Sell Signal
Technically speaking, the BTC TD sequential indicator signals a potential sell opportunity on the daily Bitcoin chart. However, this signal might not hold if the Bitcoin price manages to close the day above $91,900, potentially paving the way for a Bitcoin surge towards $100,000.
As a crypto investor, I’ve noticed that the TD Sequential has issued a sell signal on the Bitcoin daily chart. However, this signal might be invalidated if Bitcoin manages to close the day above $91,900. In such a case, we could potentially see Bitcoin surging towards $100,680!
— Ali (@ali_charts) November 16, 2024
4. RSI Shows Bitcoin Price In Overbought Territory
In simpler terms, the Relative Strength Index (RSI) of Bitcoin has moved beyond 70, suggesting that the current BTC price is in an overbought state. This could signal a possible price adjustment or correction in the near future. The RSI tool usually fluctuates between 30 and 90, with values below 30 indicating an oversold market condition, while readings above 70 signal an overbought market.
5. Bitcoin Miner Selloff
Last week, as I’ve observed, Bitcoin miners sold off following the recent surge in prices, which could potentially halt the anticipated $100K rally. This selloff continues as mining companies report lower-than-anticipated revenues for the last quarter, suggesting a need to book profits.
Key Support Levels to Watch for BTC
crypto expert Ali Martinez has pinpointed significant Bitcoin price levels that could hold steady if a price drop occurs. According to Martinez’s analysis, the primary support region is situated between $85,800 and $83,250, with a backup support zone found at $75,520 to $72,880. As per the supply-demand data presented by Martinez, these areas are crucial as they represent where investors have purchased Bitcoin.
At the moment, the cost of one Bitcoin (BTC) stands at approximately $91,160, and its total market capitalization is a staggering $1.8 trillion. It’ll be thrilling to watch the tussle between the bulls and bears unfold in this close-fought struggle near the $90,000 mark.
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2024-11-18 10:16