Breaking past the $91k threshold, Bitcoin [BTC] experienced a correction, pushing the primary cryptocurrency below $90k once again. Recent data had hinted at an impending correction. Does this signify a path for further decline in BTC’s value?
Pause in Bitcoin’s Bullish Surge
In recent weeks, Bitcoin had breached several resistance levels, sparking anticipation within the community for the digital asset to reach $100k.
However, shortly after hitting $91k, a sell signal emerged. Renowned crypto analyst, Ali, recently shared a tweet pointing out that Bitcoin’s TD sequential had flashed a sell signal.
Following the signal, BTC’s upward momentum paused, witnessing a decline of more than 3% within the last 24 hours. Presently, BTC was trading below $90k at $87,524.10.
Furthermore, CryptoCrypto had previously highlighted that the crypto market was exhibiting “extreme greed,” drawing parallels with the March surge where Bitcoin rose to $73k before retracing back to $67k.
Currently, the fear and greed index stood at 80, indicating a prevailing greedy sentiment in the market.
Despite this scenario, investors are advised to exercise patience. The Bitcoin Rainbow Chart suggested that the asset’s price was in a “HODL” position, signaling that holding onto BTC might be the favorable strategy for investors.
Glassnode’s data indicated a significant dip in Bitcoin’s NVT ratio post the recent major price surge. A decrease in this metric signifies undervaluation of the asset, hinting at a potential price surge in the near future.
Another positive development for BTC was the decrease in exchange reserves over the past 24 hours, indicating that investors refrained from panic selling. This could prevent a sharp decline in price in the short term.
Exploring Bitcoin’s Immediate Support Levels
An effective strategy during volatile price movements is to examine Bitcoin’s daily chart to identify support and resistance levels.
Bitcoin’s price reached the upper boundary of the Bollinger Bands and was currently testing its support around $86k. A successful bounce off this support level might signal the beginning of another bullish trend.
However, failure to hold above this support could lead to a drop in the range of $76k-$80k. Further downward movement from this range might push BTC back towards the $70k mark.