Key Points
- Bitcoin’s [BTC] price faces a correction after crossing the $91k mark.
- Despite the dip, data suggests that Bitcoin is undervalued and investors should continue holding.
Bitcoin [BTC] recently experienced a correction after successfully surpassing the $91k mark, leading to a drop below $90k. This correction was anticipated based on recent data trends. This suggests that Bitcoin may be subject to further price drops.
Bitcoin’s Bull Rally Comes to a Halt
Bitcoin has been breaking multiple resistance levels over the past few weeks, sparking excitement about the possibility of reaching $100k. However, a sell signal appeared shortly after hitting $91k. This signal was highlighted by a popular crypto analyst, Ali, who noted that Bitcoin’s TD sequential flashed a sell signal. The rally did indeed stop, with Bitcoin’s value declining by over 3% in the past 24 hours. At the time of writing, Bitcoin was trading below $90k at $87,524.10.
Furthermore, the crypto market was reported to be in an “extreme greed” phase, similar to the March surge when Bitcoin hit $73k before dropping to $67k. The fear and greed index currently stands at 80, indicating a similar market sentiment.
Investors Advised to Hold
Despite the current market conditions, investors are advised to remain patient. The Bitcoin Rainbow Chart indicates that the coin’s price is in the “HODL” position, suggesting that it might be beneficial for investors to continue holding their Bitcoin. Data from Glassnode also reveals that despite the recent price pump, Bitcoin’s NVT ratio experienced a significant dip last week. This metric indicates that the asset is undervalued, hinting at a potential price rise in the future.
In addition, Bitcoin’s exchange reserve has declined in the past 24 hours, suggesting that investors are not panic selling, potentially preventing a steep price drop in the near term.
Bitcoin’s Support Level
Analysing Bitcoin’s daily chart can provide insight into immediate support and resistance zones during volatile price movements. Currently, Bitcoin’s price is testing its support near $86k. If successful, this could trigger another bull rally. However, if Bitcoin fails to maintain this support and slips below it, the price could drop to between $76k-$80k. A further decline from that range could push Bitcoin down to around the $70k mark.