On-Chain Analyst Warns of Potential Risks
Bitcoin (BTC) is approaching a “top heavy” zone, which could lead to further price corrections, according to on-chain analyst Checkmate.
What is a “Top Heavy” Zone?
Checkmate explains that a top heavy zone occurs when “too many people buy too many coins at too high of a price.” This creates a situation where a large number of investors are holding coins at a high cost basis, making them vulnerable to losses if the price falls.
Key Decision Point for Short-Term Holders
Checkmate notes that short-term Bitcoin holders are currently at a key decision point. If the price continues to fall, they may face significant underwater losses, which could trigger a sell-off.
Trader Advice
Checkmate advises traders to pay attention to potential trigger points that could indicate a shift in sentiment. He believes that a period of consolidation and correction is likely after the recent bull run.
Current Market Conditions
At the time of writing, BTC is trading at $60,541, down nearly 5% in the past 24 hours. This suggests that the market is already reacting to the potential risks associated with the top heavy zone.
