Bitcoin investors have been looking forward to $100K levels as the bulls hold BTC above $90,000 on the weekly close. However, the latest on-chain data and metrics indicate Bitcoin price could face a steep correction of 10-15% ahead. This means that BTC price may slip to $76,000 first before resuming the next rally to $100K, which is also in line with technical chart patterns.
Bitcoin Price Heading for a Steep Correction?
Five on-chain metrics suggest that the Bitcoin price could be heading for a steep correction, with chances of taking a dive under $80,000. Popular crypto analyst Ali Martinez has mentioned five such metrics that flash warning signs ahead.
1. Bitcoin Fear and Greed Index In “Extreme Greed”
The Bitcoin fear and greed index highlights the market sentiment on a scale of 1-100 with close to 100 being the condition of extreme greed and close to 1 being extreme fear. Currently, the score is 83/100 which shows a condition of extreme greed and caution ahead.
Bitcoin Fear and Greed Index is 83 ~ Extreme Greed
Current price: $89,882 pic.twitter.com/kmA4iEAno8— Bitcoin Fear and Greed Index (@BitcoinFear) November 18, 2024
Analyst Ali Martinez noted: “This greed has spilled over retail investors as seen in a significant spike in Google search interest for Bitcoin”.
2. Profit Booking By Investors After Bitcoin Price Rally
Analyst Martinez also noted that during the recent Bitcoin price rally, investors have realized $5.42 billion in profits, coinciding with a significant increase in the sell-side risk ratio, which has now reached 0.524%. Elevated sell-side risk ratios often signal increased selling pressure, potentially leading to heightened market volatility. Thus, as profit-taking grows, investors should maintain caution moving ahead, said Martinez.
3. TD Sequential Indicator Flashes Sell Signal
From a technical perspective, the BTC TD sequential indicator presents a sell signal on the daily BTC chart. This signal will only be invalid if the Bitcoin price gives a daily close above $91,900, which could further propel it to a $100K Bitcoin rally.
The TD Sequential recently presented a sell signal on the #Bitcoin daily chart. But now it is at risk of invalidation. If $BTC can print a daily close above $91,900, it could rise toward $100,680! pic.twitter.com/oTLyn36yRR
— Ali (@ali_charts) November 16, 2024
4. RSI Shows Bitcoin Price In Overbought Territory
The Bitcoin RSI levels have now surged past 70 showing that the BTC price is currently in the overbought territory, while hinting at a potential price correction ahead. The RSI indicator is helpful in identifying trends and typically oscillates between 30-90. An RSI under 30 indicates oversold condition while above 70 shows overbought conditions.
5. Bitcoin Miner Selloff
As reported by CoinGape, selloffs by Bitcoin miners last week following the recent run-up triggered a decline in prices. This could potentially put a break to the $100K rally ahead. The continued selloff comes amid profit-book with BTC mining companies reporting lower-than-expected revenue during the last quarter.
Key Support Levels to Watch for BTC
Crypto analyst Ali Martinez has identified critical support levels for the Bitcoin price in the event of a price correction. Martinez noted that the first major support range lies between $85,800 and $83,250, with a secondary support zone at $75,520 to $72,880. Per the supply-demand data shared by Martinez, these are the critical areas where investors have bought BTC.
As of press time, the BTC price is trading at $91,160 with a market cap of $1.8 trillion. It will be interesting to see the battle between the bulls and bears in this tight fight at around $90,000.
Bhushan Akolkar
Bhushan is a FinTech enthusiast with a keen understanding of financial markets. His interest in economics and finance has led him to focus on emerging Blockchain technology and cryptocurrency markets. He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
