Bitcoin's recent advances have stalled as a sell signal appeared on its daily chart, hinting at a possible correction.
Bitcoin's Bull Run Takes a Pause
In recent weeks, Bitcoin has overcome multiple resistance levels, creating excitement among investors with hopes of reaching $100k. However, after hitting $91k, a sell signal emerged on the chart. Crypto analyst Ali noted on Twitter that Bitcoin’s TD sequential indicated a sell signal. The rally indeed slowed following this signal with Bitcoin's value dropping more than 3% in the past 24 hours, trading under $90k at $87,524.10. It has also been reported that the crypto market is currently in an 'extreme greed' phase, similar to the rise in March when Bitcoin hit $73k before dropping to $67k.
Current Position and Prospects
Despite the current market sentiment, investors are advised to remain patient. The Bitcoin Rainbow Chart indicates that Bitcoin's price is in the 'HODL' position, suggesting potential benefits for those holding Bitcoin. Data from Glassnode shows a significant drop in Bitcoin's NVT ratio last week despite the recent major price increase.
Future Direction of Bitcoin
Currently, Bitcoin is testing its support near $86k on its daily chart. A successful test could trigger another bull rally. However, if the support fails, Bitcoin might fall to the range of $76k-$80k. A further decline could push Bitcoin near the $70k mark. Furthermore, Bitcoin’s exchange reserve has been declining over the past 24 hours, indicating that investors are not panic selling, which may help prevent further price drops.
While current signals suggest a possible correction, key metrics show that Bitcoin is undervalued, indicating potential for future price gains.
