On-chain indicators and market sentiment suggest that the Bitcoin price may face a 10-15% correction, dropping below $80,000, before pushing back up to $100.
Bitcoin investors have been anticipating the $100K level, as bulls keep BTC above $90,000 at weekly closes. However, the latest on-chain data and indicators suggest that the Bitcoin price may face a sharp correction of 10-15% in the future. This means the BTC price may first slide to $76,000 before recovering for the next rebound to $100, which also aligns with technical chart patterns.
Is the Bitcoin price plummeting?
Five on-chain indicators suggest that the Bitcoin price may be heading for a sharp correction, potentially falling below $80,000. Popular cryptocurrency analyst Ali Martinez mentioned five such indicators that will issue warning signals in the future.
1. The Bitcoin Fear and Greed Index in 'Extreme Greed'
The Bitcoin Fear and Greed Index highlights 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 a situation of extreme greed and caution in the future.
Analyst Ali Martinez pointed out: 'This greed has spread to retail investors, as evidenced by the sharp surge in Google search interest for Bitcoin.'
2. Investor profit booking after Bitcoin price increase
Analyst Martinez also noted that during the recent Bitcoin price increase, investors realized $5.42 billion in profits, while the seller risk ratio increased significantly, currently at 0.524%. An increased seller risk ratio usually indicates rising selling pressure, which may lead to increased market volatility. Therefore, Martinez stated that investors should remain cautious as profit-taking grows.
3. TD Sequential indicator flashing sell signal
From a technical perspective, the BTC TD Sequential indicator presents a sell signal on the BTC daily chart. This signal only becomes invalid if the daily closing price of Bitcoin is above $91,900, which could further push it up to a Bitcoin rebound at $100.
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, suggesting a potential price correction in the future. The RSI indicator helps identify trends and typically fluctuates between 30-90. An RSI below 30 indicates oversold conditions, while above 70 indicates overbought conditions.
5. Bitcoin miner sell-off
According to CoinGape, the recent sell-off by Bitcoin miners last week triggered a price drop after the recent rise. This could break through the future $100 rebound. The ongoing sell-off occurred in profit books, with BTC mining companies reporting lower-than-expected income in the last quarter.
Key support levels for BTC to watch
Cryptocurrency analyst Ali Martinez has identified key support levels for Bitcoin prices during price adjustments. Martinez noted that the first major support range is between $85,800 and $83,250, while the secondary support level is between $75,520 and $72,880. According to the supply and demand data shared by Martinez, these are key areas for investors to buy BTC.
As of the time of writing, the BTC price is $91,160, with a market capitalization of $1.8 trillion. In this fierce battle, the fight between bulls and bears will be interesting to see around the $90,000 mark.
