Over the last few weeks, Bitcoin's sharp rally has put the largest digital asset in the spotlight of the crypto market, with BTC surging to new all-time highs on Wednesday. While this leg up has been remarkable, BTC might be poised for a potential correction as the uptrend has started to show signs of cooling off, raising speculation among investors and traders about its price performance in the near term.
A Potential Correction Phase Sparks For Bitcoin
Certain developments around Bitcoin show that the crypto asset may be on the verge of a price correction after its recent significant upside movement. Given the decreasing price momentum and overbought circumstances indicated by technical indicators, it appears that BTC's current price level is due to this short-term pullback before rallying once again.
According to to analysts at IC News, traders are presently waiting on huge unrealized profits as BTC continues to rise. Specifically, this makes it more likely that the rally will stall and a price correction will take place, offering potential purchases at lower price levels. Thus far, several crucial support levels are being closely observed to determine BTC's capacity to sustain its upward direction or whether a more substantial dip may occur.
It is worth noting that the anticipated pullback for Bitcoin is also indicated by the key Relative Strength Index (RSI) indicator, which has moved into an overbought territory due to the strong uptick in Bitcoin's value. This further raises the likelihood of a brief correction or consolidation phase in the short term. As a result, the next immediate support level to watch out for is located at the $85,000 mark.
In the event that the crypto asset declines and falls below the aforementioned range, the short-term bulls might feel pressured to take profits, which could ultimately trigger a descent to the 20-day Exponential Moving Average (EMA) at the $76,451 range.
On the other hand, should Bitcoin maintain an upward movement, the $93,554 mark could serve as the next critical barrier. Furthermore, if the bulls manage to push prices past the pivotal level, the BTC/USDT pair may surge to the psychological resistance point of $100,000. Meanwhile, when this key level is breached, IC News is confident the following crucial stop for BTC will most likely be $113,331.
BTC's Price Showing Bearish Sentiment
After hitting a new all-time high at $93,420, BTC has pulled back below $88,000, sparking worries of further losses. Although the dip may pose an extended price drop, several analysts believe the move is essential for the digital asset's future rally.
In the past day, BTC has fallen by nearly 3%, bringing its value to $87,899. However, the larger view such as the weekly and monthly time frames, is showing an upside strength of over 15% and 31% respectively.
The decline today could be attributed to investors' waning confidence, as evidenced by a decrease in BTC's trading volume in the past day, falling by more than 26%.
Featured image from Unsplash, chart from Tradingview.com
