Key Points
- Bitcoin’s daily chart indicated a sell signal, suggesting a potential correction.
- Despite the recent price drop, data suggests Bitcoin is undervalued and investors are not panic selling.
Bitcoin’s recent rally seems to have come to a pause as a sell signal appeared on its daily chart, hinting at a possible correction.
The cryptocurrency had successfully crossed the $91k mark before facing a downturn, pushing its value below $90k.
Bitcoin’s Bull Run Takes a Break
In recent weeks, Bitcoin has broken through multiple resistance levels, stirring excitement among investors with hopes of reaching $100k.
However, after hitting $91k, a sell signal emerged. Crypto analyst Ali shared on Twitter that Bitcoin’s TD sequential signaled a sell.
The rally did indeed slow down following this signal, with Bitcoin’s value dropping over 3% in the past 24 hours, trading under $90k at $87,524.10.
Additionally, it has been reported that the crypto market is currently in an “extreme greed” phase, similar to the surge in March when Bitcoin hit $73k before falling to $67k.
Bitcoin’s Current Position and Future Prospects
Despite the current market sentiment, investors are advised to remain patient. The Bitcoin Rainbow Chart indicates that Bitcoin’s price is in the “HODL” position, suggesting that it could be beneficial for investors to hold onto their Bitcoin.
Data from Glassnode shows that Bitcoin’s NVT ratio saw a significant drop last week, despite the recent major price increase. This drop suggests that the asset is undervalued, hinting at a potential price rise in the future.
Furthermore, Bitcoin’s exchange reserve has been declining over the past 24 hours, indicating that investors are not panic selling. This could potentially prevent a severe price drop in the near term.
At present, Bitcoin is testing its support near $86k on its daily chart. A successful test could trigger another bull rally. However, if Bitcoin fails to hold this support, it could fall to the range of $76k-$80k. A further decline from that range could push Bitcoin down near the $70k mark.
