What happens when 3 metrics indicate that the BTC price is too hot and is likely to decline?
Bitcoin price is consistently hitting all-time highs, but several indicators suggest BTC is oversold.
The remarkable performance of Bitcoin has led to concerns about a sell-off as many take profits at higher levels.
Here are three technical indicators that suggest BTC price could correct in the short term.
The TD sequential indicator flashes a sell signal on the 12-hour timeframe
Analyst Ali warns short-term traders that a reversal could be imminent.
Ali posted the following chart showing that the TD sequential indicator sent a sell signal in the 12-hour chart of BTC.
In this case, the indicator predicts that BTC price could decline from current levels, down as much as 3.5%, trading around $70,000.
Bitcoin price shows “overheating signal”
Bitcoin prices have been trending “only up” since January 23, after the “sell the news” effect of spot Bitcoin ETFs faded.
These new BTC investment funds have seen massive capital inflows since their launch on January 11, with assets under management reaching $55.3 billion on March 11.
This has led to the emergence of “overheating signals” in the Bitcoin market. Analysts at CryptoQuant are warning that BTC could soon experience major corrections despite reaching new all-time highs.
On March 8, the company CryptoQuant posted a series of posts on social network X showing some metrics with “overheating potential.”
CryptoQuant also highlighted that traders' unrealized profits have reached 57%, which has historically been associated with corrections as traders are forced to take profits for long periods of time.
Meanwhile, data from IntoTheBlock shows that 100% of Bitcoin holders are currently in profit, potentially increasing the chances of a short-term profit-taking sell-off.
