Following a period of upward momentum, Bitcoin (BTC) has recently experienced a pullback. A recent analysis also highlighted the possibility of a price correction looming ahead.
Crypto experts decided to delve into BTC’s on-chain data to determine whether this correction is temporary or indicative of a larger shift in trend.
Evaluating Bitcoin’s Performance
Bitcoin has seen a deviation from its bullish trajectory. CoinMarketCap data shows that the leading cryptocurrency saw an increase of over 8% in price over the past week.
However, within the last 24 hours, the price movement has been relatively stagnant. As of the latest update, BTC was trading at $68,423.71 with a market capitalization surpassing $1.35 trillion.
Notably, a prominent crypto analyst, Ali, recently shared a tweet highlighting a significant development. The TD sequential, a key indicator for Bitcoin, flashed a sell signal, suggesting a potential shift towards selling pressure and a subsequent price decline.
Yet, findings from Glassnode’s analysis indicate a growing trend of BTC accumulation among investors. The Accumulation Trend Score rose from 0.5 to 0.7 in the previous week.
The Accumulation Trend Score serves as a metric reflecting the proportional increase in buying activities among entities accumulating coins on-chain, signifying a surge in buying pressure when approaching a value of 1.
Anticipating a BTC Correction
Subsequently, crypto analysts explored what lies ahead for Bitcoin amidst these developments. Recent data reveals a rise in Bitcoin’s NVT ratio, signaling a potential overvaluation likely to result in a price correction soon.
Despite this, a decline in BTC exchange reserves indicates dwindling selling pressure. Furthermore, observations of its net deposits on exchanges reaffirm the continued buying interest among investors.
Bitcoin’s net deposits remained below the seven-day average, showcasing a bullish sentiment where heightened buying pressure historically triggers price surges.
Further analysis of Bitcoin’s daily chart unveiled resistance levels posing a challenge for BTC. Noteworthy is the Relative Strength Index (RSI) approaching the overbought territory, hinting at a probable correction in prices that could see Bitcoin revisiting the $66k mark. Conversely, if the bullish momentum persists, BTC might achieve new highs around $73k.