On-chain indicators and market sentiment suggest that the Bitcoin price may face a 10-15% correction, dropping below $80,000, before rising again to $100,000.
As bulls maintain BTC above $90,000 at weekly close, Bitcoin investors have been anticipating the $100,000 level. However, the latest on-chain data and indicators suggest that the Bitcoin price may face a significant correction of 10-15%. This means the BTC price could first drop to $76,000 before recovering for another rise to $100,000, which also aligns with technical chart patterns.
Is a significant correction in Bitcoin price imminent?
Five on-chain indicators suggest that the Bitcoin price may be heading for a significant correction, potentially dropping below $80,000. Notable cryptocurrency analyst Ali Martinez mentioned five such indicators that signal future warning signs.
1. Bitcoin Fear and Greed Index indicates 'Extreme Greed'.
The Bitcoin Fear and Greed Index measures market sentiment on a scale of 1-100, with close to 100 indicating extreme greed and close to 1 indicating extreme fear. Currently, the score is 83/100, indicating that the market is in a state of extreme greed and caution.
Analyst Ali Martinez pointed out, 'This greed has spread to retail investors, as evidenced by the significant increase in search interest for Bitcoin on Google.'
2. Profit-taking by investors after Bitcoin price rise.
Analyst Martinez also noted that during the recent Bitcoin price surge, investors have realized $5.42 billion in profits, while the seller risk ratio has significantly increased to 0.524%. A rising seller risk ratio typically indicates increased selling pressure, which could lead to heightened market volatility. Therefore, as profit-taking increases, investors should remain cautious, Martinez stated.
3. TD Sequential indicator flashing sell signal.
From a technical perspective, the BTC TD Sequential indicator on the daily BTC chart is showing a sell signal. This signal will only be invalidated if the Bitcoin price closes daily above $91,900, which could further drive Bitcoin up to $100,000.
4. RSI shows Bitcoin price is in the overbought zone.
The Bitcoin RSI level has now soared above 70, indicating that the BTC price is currently in the overbought zone, while suggesting a potential price correction in the future. The RSI indicator helps identify trends, typically fluctuating between 30-90. An RSI below 30 indicates oversold conditions, while above 70 indicates overbought conditions.
5. Bitcoin miners are selling.
According to CoinGape, Bitcoin miners sold off last week after a recent surge, leading to a price drop. This could disrupt the upward momentum towards $100,000. Continuous selling has also brought about profits as BTC mining companies reported lower-than-expected revenue for the last quarter.
Key support levels for BTC are worth monitoring.
Cryptocurrency analyst Ali Martinez has identified key support levels for Bitcoin price during a price correction. Martinez noted that the first major support range is between $85,800 and $83,250, while the second support range is between $75,520 and $72,880. According to the supply and demand data shared by Martinez, these are the key areas for investors to buy BTC.
As of the time of publication, the BTC price is $91,160, with a market cap of $1.8 trillion. The fierce battle around the $90,000 mark between bulls and bears will be interesting.
