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HomeNewsBitcoin Faces a Potential Price Correction: Analyzing the Impact of Recent Market...

Bitcoin Faces a Potential Price Correction: Analyzing the Impact of Recent Market Trends and Indicators

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  • On-chain data from Santiment indicates a slight drop in Bitcoinโ€™s MVRV ratio, suggesting bearish market sentiment.
  • Despite bearish trends, the fear and greed index at 38% suggests potential for an upcoming price rally.

Bitcoin recently surpassed the $66,000 mark, generating significant attention within the cryptocurrency community. However, this upward trend was short-lived as the price dipped below this threshold again. Current data indicates that Bitcoin may be on the cusp of a major price correction.

In the last 24 hours, Bitcoin has undergone a price correction, falling under $66,000. As of this report, Bitcoin is trading at $65,504.34. ETHNews had previously indicated the likelihood of Bitcoin experiencing a price correction.ย 

Source: Crypto Bullet

ย A recent tweet from Crypto Bullet pointed out a bearish divergence on Bitcoin’s 4-hour chart, a classic indicator that often precedes a price drop.

A bearish divergence occurs when price achieves new highs while an oscillator fails to reach a new peak. This divergence suggests that momentum is waning, increasing the likelihood of a price correction. In this scenario, there is a possibility that Bitcoin could retreat to $60,000 if the bearish trend continues.

Bitcoin-BTC-13.06.10-29-Sep-2024-santiment
Source: Santiment

Further analysis from Santimentโ€™s on-chain data supports the bearish outlook, as the MVRV ratioโ€”a measure of market value to realized valueโ€”has slightly declined in recent days. This decline is typically interpreted as a bearish signal, implying a potential decrease in Bitcoinโ€™s price.

Additionally, the weighted sentiment around Bitcoin has also turned bearish, further suggesting a potential decline.

ETHNews review of Coinglassโ€™ data revealed another bearish indicator, noting that Bitcoin’s long/short ratio has fallen. This change indicates an increase in short positions relative to long positions, further suggesting that market sentiment is leaning toward a bearish phase.

Bitcoinโ€™s long-short ratio
Source: Coinglass

Despite these bearish indicators, not all signals predict a downturn. The fear and greed index currently stands at 38%, placing the market in a “fear” phase. This sentiment can often precede a market rally, as contrarian investors might see it as an opportune moment to buy.

Moreover, on the daily chart, the 9-day moving average remains above the 21-day moving average, which could indicate underlying bullish momentum.

BTCUSD_2024-09-29_18-35-12
Source: Tradingview

If the bullish signals hold, Bitcoinโ€™s price might aim for the $68,000 mark before any potential fallback to $60,000. This interplay of bearish and bullish indicators illustrates the current volatility and unpredictability of the Bitcoin market, requiring investors to stay particularly vigilant.

Disclaimer: ETHNews does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. ETHNews is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: [email protected] Phone: +49 160 92211628
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