- Bitcoin Surges 34.39% This Month; Ali Martinez Predicts Sharp Correction With Retail Interest At Peak Levels.
- Google Searches For Bitcoin Spike, Historically Linked To Market Corrections; 2021 Saw Drops Of Up To 50%.
Bitcoin’s recent surge to an all-time high of $93,483 has captured the attention of investors and analysts alike. However, amidst the bullish fever, there are cautionary signals suggesting that Bitcoin might be heading for a correction.
Firstly, the crypto enthusiast community is currently exuding extreme greed, with the greed index peaking at 90%. This sentiment often precedes market pullbacks as it indicates that market participants could be overextended.
#Bitcoin could be about to suffer a steep correction!
Here is why 👇🧵
— Ali (@ali_charts) November 17, 2024
Historical data supports this view, showing that significant spikes in Bitcoin-related Google searches often correlate with subsequent price corrections. For instance, similar surges in 2021 led to market drops ranging from 26% to 50%.
Source: X
Secondly, Bitcoin holders have recently realized profits totaling $5.42 billion, indicating a potential pivot to a seller’s market. This mass profit-taking could increase sell-side pressure, tipping the balance towards a market correction.
Source: X
From a technical analysis standpoint by ETHNews, the TD sequential indicator has flashed a sell signal on the daily charts, suggesting that the current uptrend may be exhausted. This technical perspective is reinforced by the Relative Strength Index (RSI), which places Bitcoin in the overbought zone with a reading of 75.91.
Historically, such high RSI levels have often preceded price retractions, as they indicate that the asset may be overvalued relative to its immediate buying momentum.
Should a correction occur, Bitcoin is expected to find initial support at around $85,800, with further potential bases at $83,250 and $75,520. The latter could see lows extending down to $72,880 if the downward trend intensifies.
Source: Cryptoquant
Further supporting the possibility of a pullback is Bitcoin’s Market Value to Realized Value (MVRV) ratio, which has seen a pronounced rise to a level of 2.5.
This metric is used to gauge when the traded price is significantly above the ‘real’ value of the tokens, suggesting overbought conditions which typically lead to price corrections.
Source: Cryptoquant
Additionally, the Network Value to Transaction (NVT) ratio has escalated from 14 to 44, highlighting a speculative price increase that outpaces actual transactional activity on the blockchain.
While the potential for a new all-time high near $100,000 remains if current support levels hold, investors are advised to monitor these indicators closely.
A balanced approach considering both the speculative enthusiasm and the underlying financial metrics will be crucial for navigating the volatile Bitcoin market.
The current price of Bitcoin (BTC) is $91,603 USD, showing an increase of 1.94% today.
Key Observations:
- Price Momentum: Bitcoin continues its strong uptrend, with a weekly gain of 13.95% and a monthly rise of 33.95%. Year-to-date, BTC has surged by 116.87%, indicating sustained bullish momentum.
- Market Capitalization: The market cap of Bitcoin stands at $1.81 trillion USD, with a 24-hour trading volume of $71.41 billion USD. This reflects high liquidity and strong trading activity.
Technical Analysis
Source: Tradingview
Bitcoin is approaching resistance around $92,000 USD, which has been a significant hurdle recently. If it breaks above this level, we may see a rally towards the psychological target of $100,000 USD. However, a failure to break through could result in a pullback towards support at $85,000 USD.
