The price of Bitcoin has been experiencing a steady increase in the past week, with the latest bullish trend pushing the leading cryptocurrency above the $68,000 mark on the trading charts. However, this upward trajectory may soon face a reversal, albeit temporarily.
This shift in momentum is evident from the emergence of a bearish divergence on Bitcoin’s price chart.
Key Advantages of Bitcoin
Based on data from CoinMarketCap, Bitcoin’s price saw a significant surge of over 9% last week, propelling it beyond $68,000. CryptoCrypto has previously highlighted certain developments that likely contributed to the recent rally of BTC.
One significant factor was the decrease in Bitcoin’s supply held on exchanges to a level not seen in five years. This reduction clearly signaled a prevailing bullish sentiment in the market, indicating a potential price increase.
Additionally, there was a notable surge in Bitcoin’s Open Interest, with the metric reaching a record $20 billion, just 8% below its all-time high. A rising Open Interest typically suggests a higher probability of the current price trend continuing.
Satoshi Club, a prominent source for crypto updates, recently shared information highlighting another crucial development. According to their report, the supply of Bitcoin held by addresses that purchased in the last 12 months has reached a two-year high, a trend bolstered by ETF inflows amounting to $2.1 billion in the past five days.
Despite these positive indicators, some concerns have been raised by analysts like Ali, who pointed out a bearish divergence, hinting at a potential short-term price correction. Given this scenario, a detailed examination of Bitcoin’s current status becomes essential.
Is a Price Adjustment Imminent?
An analysis of CryptoQuant’s data by CryptoCrypto uncovered several intriguing metrics. The binary CDD for Bitcoin was in the green, indicating that the movement of long-term holders over the past week was below average, signaling their inclination to retain their holdings.
On the other hand, the aSORP data suggested an increased selling activity by investors looking to capitalize on profits, a pattern that could signal a market peak amid a bullish phase.
Furthermore, the NULP indicator pointed towards a bearish trend, indicating that investors were experiencing a phase of high unrealized profits.
Concluding the assessment, a thorough examination of Bitcoin’s daily chart was conducted to identify potential support levels should a price correction occur.
According to the analysis, a price correction could drive Bitcoin’s value back to $66,000. A breach below this threshold might further push the cryptocurrency down to $62,800.