Following a period of upward movement, Bitcoin (BTC) has experienced a correction in recent hours. Recent reports have also highlighted a potential price adjustment on the horizon.
Analysis from CryptoCrypto delved into BTC’s on-chain data to determine the duration of this correction and the possibility of a shift in trend.
Bitcoin’s Current Status
Bitcoin has seen its bullish momentum wane. According to CoinMarketCap, the leading cryptocurrency recorded an 8% price increase over the past week.
However, over the last 24 hours, the price stagnated marginally at $68,423.71, boasting a market capitalization exceeding $1.35 trillion.
A notable crypto analyst, Ali, recently shared a tweet unveiling a significant update. The TD sequential indicator for Bitcoin flashed a sell signal, indicating a potential rise in selling activity.
Despite the sell signal, Glassnode’s data analysis revealed an uptick in BTC accumulation. The Accumulation Trend Score surged from 0.5 to 0.7 last week, portraying increased buying interest among investors.
The Accumulation Trend Score is a metric reflecting the proportion of entities actively accumulating coins on-chain relative to their BTC holdings. A score nearing 1 signifies heightened buying pressure.
Is BTC Set for a Correction?
CryptoCrypto conducted a detailed analysis to predict Bitcoin’s future performance. The cryptocurrency’s NVT ratio has recently risen, indicating potential overvaluation and signaling an imminent price correction.
However, BTC’s declining exchange reserves suggest dwindling selling pressure. Additionally, the consistent net deposits on exchanges confirm continued investor interest in buying BTC.
Bitcoin’s low net deposit compared to the seven-day average and decreasing exchange reserves both bolster the bullish case, as elevated buying pressure typically leads to price increases.
Further scrutiny of Bitcoin’s daily chart revealed that the cryptocurrency faced resistance, particularly as its Relative Strength Index (RSI) entered the overbought territory.
If this trend persists, a price correction might occur, possibly pushing BTC back to $66,000. Alternatively, if the bullish momentum continues, Bitcoin could reach $73,000.