Bitcoin Explodes 11% Weekly but the Chances of a Correction Increase: BTC Price Analysis

9 months ago 2

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Bitcoin’s price is finally showing signs of breaking the previous all-time high to the upside.

Cryptocurrency is entering uncharted territories, and predicting its upside potential becomes a lot more challenging. However, there are some hints interpreted from technical and on-chain analysis.

Technical Analysis

By TradingRage

The Daily Chart

On the daily timeframe, the price is finally breaking the previous all-time high to the upside, with the price climbing toward the $70K level.

The psychological resistance levels of $70K and $80K might be the upcoming targets for BTC in the coming months. Yet, the Relative Strength Index displays a clear overbought signal, which can point to a potential correction or consolidation in the short term.

The 4-Hour Chart

Looking at the 4-hour timeframe, the recent consolidation becomes much more clear. The price is gradually climbing above the $69K resistance level, and a longer-term rally might soon begin.

Yet, the Relative Strength Index is also entering the overbought region in this timeframe, indicating that the road ahead might get bumpier for the BTC price. If it goes through a pullback, the $64K support level might be a potential turning point toward higher prices.

Sentiment Analysis

By TradingRage

Bitcoin Funding Rates

While Bitcoin’s price has been rallying aggressively after making a new all-time high, market sentiment is in a euphoric state. However, this extreme optimism might prove costly for BTC.

This chart demonstrates the funding rates metric, which measures whether the buyers or sellers are executing their orders more aggressively. Positive values indicate bullish sentiment, while negative values are associated with bearish sentiment.

It is evident that the funding rates have been displaying highly positive values recently. The metric is even showing values higher than those witnessed during the previous all-time high. As a result, the probability of a long liquidation cascade seems very high in the short term, which could lead to a pullback or reversal.