TL;DR
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Bitcoin’s recent surge above $88K might be short-lived as technical indicators hint at overbought conditions.
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Market analysts foresee a possible correction, with downside targets ranging between $72,800 and $80,000.
Beware of a New Pullback
The primary cryptocurrency started the business week on the right foot, with its price soaring above $88,000 for the first time since March 7. Despite the solid gains, though, one important indicator suggests that the rally might be short-lived and followed by a new correction.
The metric in question is Bitcoin’s Relative Strength Index (RSI), which measures the speed and change of price movements.
The ratio varies from 0 to 100, and readings above 70 typically signal that the asset might be in overbought territory, with its price potentially preparing to head south. Over the past several hours, the RSI has been hovering slightly above that bearish zone.
Some analysts also support the thesis that the BTC bulls might suffer additional pain in the near future. The X user Koroush AK believes the asset’s price pattern continues to follow an HTF downtrend. The market observer projected that the valuation might drop to as low as $72,800 unless BTC reclaims $92,000.
Captain Faibik gave their two cents, too. The analyst claimed BTC is still trading within a falling wedge pattern, envisioning a potential decline to $80,000 before a subsequent surge toward $109,000 in the following weeks.
How About a New ATH?
Another well-known person in the crypto space who touched upon the matter is Arthur Hayes (co-founder and former CEO of BitMEX). Earlier today (March 24), he predicted that BTC’s price is more likely to hit a fresh peak of $110,000 than tank to $76,500.
“If we hit $110k, then it’s yachtzee time and we ain’t looking back until $250k,” he added.
Hayes based his prediction on the potential quantitative easing (QE) policy the US Federal Reserve might enforce in the coming months. The central bank usually takes this step to stimulate the economy when interest rates are already low and traditional methods aren’t enough.
QE involves money printing to buy government bonds and other financial assets. It is typically implemented during recessions or financial crises and encourages borrowing, spending, and investing.
Currently, the US inflation rate is higher than the Fed’s target of 2%, which seems to be among the main reasons why interest rates remained unchanged after the previous FOMC meeting. It will be interesting to see whether the central bank will lower the benchmark (as expected) in its next meeting and whether that will benefit the crypto market.
