Key Points
- Bitcoin [BTC] may be on the brink of a major price correction, with indicators suggesting a bearish trend.
- Despite some bearish signals, certain metrics indicate a potential for a price increase.
Bitcoin [BTC] managed to surpass the $66k mark a few days ago, but the trend was short-lived as it dropped below that threshold again.
Recent data hints that this could mark the start of a significant price correction.
Impending Correction?
Bitcoin experienced a price correction in the past 24 hours, bringing it under $66k.
At the time of writing, BTC was valued at $65,504.34.
There have been previous reports suggesting the potential for BTC to undergo a price correction.
Crypto Bullet, a well-known crypto analyst, recently tweeted about a bearish divergence on BTC’s 4-hour chart.
Typically, such a divergence implies a high likelihood of a price correction.
The tweet suggested that if a bearish trend reversal occurs, BTC could potentially drop to $60k.
What Do The Metrics Say?
An analysis of Santiment’s data revealed that BTC’s MVRV ratio has slightly dropped after a recent spike, indicating a bearish signal.
The market sentiment towards the coin has also become bearish, as evidenced by the decrease in its weighted sentiment.
Moreover, data from Coinglass revealed another bearish signal – Bitcoin’s long/short ratio has dipped.
This drop implies an increase in short positions in the market compared to long positions, which could be interpreted as a bearish signal.
Nevertheless, not all indicators are bearish.
For instance, the fear and greed index was at 38% at the time of writing, indicating a “fear” phase in the market.
When this happens, it typically suggests a potential price increase.
If this is the case, BTC may not drop to $60k in the near term.
Potential Bullish Signals
Upon analyzing the daily chart, the 9-day MA was still well above the 21-day MA, indicating a potential bullish advantage in the market.
If a bull rally were to start again, BTC might first aim for $68k.
However, if the aforementioned analysis proves accurate, BTC could potentially fall to $60k again.