Is the Crypto Market in for Another Bitcoin Price Correction?

Bitcoin recently surged to a new all-time high of almost $99,700 on November 22, marking a 8% weekly increase, but has since pulled back to around $97,000.

This has sparked speculation about a potential price correction after its impressive seven-week rally, raising questions among investors about the sustainability of this bullish momentum.

On November 23, crypto analyst Ali Martinez shared his prediction, noting that the TD Sequential indicator had issued a sell signal on Bitcoin’s 12-hour chart, suggesting a possible stronger dip. This is supported by Bitcoin’s 62% gain since October, with technical indicators like the RSI staying in the overbought zone, signaling a potential pullback. Additionally, Bitcoin’s Fear Greed Index hit a 4.5-year high of 94, indicating extreme greed and possible overvaluation. Maartunn also pointed out that traders’ unrealized profits have reached 57%, approaching the 69% peak seen in March, adding to the risk of a correction.

The TD Sequential presented a sell signal on the #Bitcoin $BTC 12-hour chart, anticipating a price correction to $91,583 or even $85,610! #BTC needs to close above $100,535 to invalidate the sell signal. pic.twitter.com/rkFYmgCr46

— Ali (@ali_charts) November 23, 2024

In light of these factors, the possibility of a price retracement remains high, especially with the growing concerns over market overexuberance. However, there is also a prevailing optimism surrounding Bitcoin’s potential to extend its rally. With major catalysts like Donald Trump’s electoral win and an increase in ETF inflows fueling positive sentiment, Bitcoin could maintain upward momentum despite the warning signals. Market participants will likely be closely watching the $100,535 threshold, as a close above this level could signal the continuation of the bullish trend.

Martinez predicts that if Bitcoin corrects, it could drop to around $91,583, with further downside to $85,610. However, he also suggests that if Bitcoin manages to stay above $100,535, the sell signal could be invalidated, allowing the rally to continue, fueled by factors like political events and increasing ETF inflows. As the crypto market continues to evolve, the coming weeks will be crucial in determining whether Bitcoin can consolidate at its current levels or faces a deeper pullback.