Bitcoin Bulls Wrestle with Selling Pressure as Price Corrects

Ongoing Bitcoin Sell-Off Why Data Indicates a Necessary Correction for Market Health

Bitcoin’s price sell-off persists, emphasizing the importance of a necessary correction.

Bitcoin (BTC) price took a 5% dive in the last 24 hours, now trading at $41,645. Don’t panic just yet, because despite the sharp price correction, there are still reasons to be optimistic. But first, let’s take a closer look at what’s been happening.

Over-Extended and Running Out of Steam

Bitcoin dropped as much as 7.2%, hitting a low of $40,300 on Coinbase. This sparked a conversation among analysts, with one notable comment coming from Julio Moreno, head of research at on-chain analytics firm Cryptoquant. Julio pointed out that the flagship cryptocurrency was “overheating after the recent rally above” the psychological $40,000 level. Picture BTC as a car engine revving too hard, risking overheating and losing its power.

Meanwhile, on-chain data analysis from Lookintobitcoin revealed that Bitcoin’s price has reached its golden ratio multiplier near-term target. This indicates that the price has reached “over-extended levels” and needs to correct or slow down. Think of it like a marathon runner going full speed but needing to slow down to catch his breath before continuing.

The Stiff Hurdle at $44,000

So, what’s causing the current market correction and resistance? A major obstacle is the $44,000 supply zone, where Bitcoin has been struggling to break through. The Lookintobitcoin golden ratio multiplier indicator shows that this zone has been a tough barrier, with Bitcoin’s price stuck around it for the past week.

• Bitcoin Takes a Tumble: A Rollercoaster Ride for Crypto Investors
• When Blockchain Goes Bonkers: Binance Founder Faces Sentencing, while Terraform Labs Co-founder Could be Extradited
• Google’s Sneaky Crypto Ad Rule Revision Get Ready for the Bitcoin ETF Hype!

This resistance is further amplified by on-chain data from IntoTheBlock’s in/out of the money around price (IOMAP) model. The model reveals a group of sellers who bought Bitcoin between the price range of $43,346 and $44,627. These sellers, eager to break even, are likely to aggressively sell any attempts to push the price above this level.

Bear Trap or Buying Opportunity?

Now, before you panic sell your Bitcoin, consider this: the ongoing correction could actually be a bear trap, an opportunity for a healthy correction in a continued bullish trend. In fact, data from crypto market intelligence firm Santiment shows that Bitcoin’s exchange outflows are increasing, indicating a preference for holding rather than selling. This suggests that the recent dip toward $40,000 might just be a short-term correction before the upward trend continues.

From a technical standpoint, Bitcoin’s price remains above all major moving averages, with areas of strong support on the downside. The moving average convergence divergence indicator (MACD) is still positive, signaling that market conditions favor the upside.

So, What’s Next?

With all these factors in mind, it’s likely that Bitcoin’s price will continue to rise from current levels, with buyers aiming to break above $44,000. If successful, we could see Bitcoin reach the psychological milestone of $50,000, especially with the upcoming decision from the United States Securities and Exchange Commission regarding spot Bitcoin exchange-traded fund applications, as well as the next Bitcoin halving event expected in the spring of 2024.

In conclusion, fellow Bitcoin enthusiasts, buckle up and hold on tight. Despite the current turbulence, there’s plenty of reason to remain optimistic about the future of our favorite digital asset. Keep calm, HODL on, and enjoy the ride to the moon!

Are you ready to ride the Bitcoin rollercoaster? Share your thoughts and join the discussion below!

We will continue to update Blocking; if you have any questions or suggestions, please contact us!