Analysis of recent data indicates the possibility of short-term price corrections for Bitcoin. This article discusses key charts and indicators pointing to potential market risks.
Hidden Bearish Divergence on RSI
Bitcoin shows a hidden bearish divergence between its price and the Relative Strength Index (RSI). This divergence occurs when the price reaches new highs while the RSI forms equal or lower highs. This signals weakening momentum behind the current rally, often leading to downside corrections.
CME Gap as a Downside Magnet
On the daily chart, there is a CME gap between $114,380 and $115,635. These gaps occur when Bitcoin trades outside regular hours on the Chicago Mercantile Exchange, leaving price voids that are often filled in active trading sessions. Historical data shows that Bitcoin tends to 'fill' these gaps, increasing the likelihood of a drop to the $114,000 level.
Bitcoin in a Distribution Zone
Anonymous crypto analyst Gaah noted that the Bitcoin Cycle Indicators Index (IBCI) has entered the distribution zone, a region historically associated with market euphoria and interim tops. Although the index only touches the lower base of the zone, this message comes with potential risks. Key indicators remain below mid-levels, suggesting that retail speculation has yet to peak.
In conclusion, current indicators suggest potential short-term risks for Bitcoin. Investors and traders should pay attention to these signals while factoring in potential market corrections.
