Bitcoin recently hit a new all-time high, but experts are predicting a possible correction. Let’s break down what’s happening.
A Recent High, Then a Slight Dip
Bitcoin soared to a record high of $99,655 on November 22nd, a 7.99% jump in just one week! However, it’s since pulled back slightly, trading around $98,200. This small retracement has fueled speculation about a larger correction.
Analysts Predict a Price Drop
Crypto analyst Ali Martinez is predicting a significant Bitcoin price drop. He’s using a technical indicator called the TD Sequential, which suggests a sell signal on the 12-hour chart. This indicator often signals potential price reversals.
This prediction isn’t out of the blue. Bitcoin’s price has increased by 61.76% since early October, and several indicators point to potential overvaluation.
- Overbought RSI: Bitcoin’s Relative Strength Index (RSI) has been consistently in the “overbought” zone, suggesting a price pullback is likely.
- Extreme Greed: The Fear & Greed Index is at a 4.5-year high of 94, indicating extreme investor greed. While bullish, this level often precedes corrections.
- High Unrealized Profits:
Bitcoin traders’ unrealized profits are at 57% and approaching the March 2024 peak of 69%, increasing the chance of a correction.
How Low Could Bitcoin Go?
Martinez suggests that if the correction happens, Bitcoin could fall to $91,583, or even as low as $85,610—a potential 12.64% drop from its current price.
However, there’s a chance Bitcoin could avoid a major correction. If it closes above $100,535 on the 12-hour chart, it could negate the sell signal.
Recent events like Donald Trump’s electoral victory and increased ETF inflows could also support continued upward momentum.
Bitcoin’s Current State
According to CoinMarketCap, Bitcoin is currently trading at around $98,213, down slightly from the previous day. Daily trading volume is down as well, but long-term holders are still seeing significant gains (45.06% in the past 30 days). Bitcoin remains the largest cryptocurrency by market cap, at $1.95 trillion.
