{"id":20264,"date":"2024-11-13T18:22:53","date_gmt":"2024-11-13T18:22:53","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=20264"},"modified":"2024-11-13T18:22:53","modified_gmt":"2024-11-13T18:22:53","slug":"4-reasons-why-bitcoins-btc-price-might-see-a-short-term-correction","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=20264","title":{"rendered":"4 Reasons Why Bitcoin\u2019s (BTC) Price Might See a Short-Term Correction"},"content":{"rendered":"

TL;DR<\/strong><\/p>\n

Certain on-chain metrics<\/span> suggest overbought conditions, flashing the sell signal on BTC.
\nThe Fear and Greed Index is currently in the \u201cExtreme Greed\u201d zone, which could indicate a local top and a subsequent price decline.<\/p>\n

<\/a><\/h2>\n

The Bearish Signals<\/span><\/h2>\n

Bitcoin (BTC) has been the talk of the town recently. It entered a massive bull run mode since Donald Trump\u2019s win<\/a> in the US presidential elections last week, with its price reaching a record high of $92,000 on November 13. However, s<\/span>ome important factors <\/span>suggest that it could pull back from these heights.
\n<\/span><\/p>\n

<\/a>BTC Price, Source: CoinGecko<\/p>\n

The first element we will focus on is BTC\u2019s Relative Strength Index (RSI). The technical analysis tool measures the speed and change of price movements, varying from 0 to 100.<\/span><\/p>\n

Readings above 70 show that the asset might be overbought and headed for a correction. On the other hand, a drop below 30 typically indicates a potential buying opportunity. <\/span>As of the moment of<\/span> writing these lines, the RSI is <\/span>hovering<\/span><\/a> at around 77, flashing the sell signal.<\/span><\/p>\n

Next on the list is BTC\u2019s Market Value to Realized Value (MVRV), which, like<\/span>\u00a0the aforementioned metric, helps traders examine overbought or oversold conditions.<\/span> A high ratio <\/span>might<\/span>\u00a0<\/span>be<\/span> a precursor of a price retreat, with <\/span>the MVRV currently <\/span>standing<\/span><\/a> at approximately 2.6.<\/span><\/p>\n

\u201cHistorically, values between 2.6 and 5 have aligned with market tops, yet each cycle has seen progressively lower peaks,\u201d IntoTheBlock <\/span>stated<\/span><\/a>.<\/span><\/p>\n

The <\/span>third element is the<\/span> Network Value to Metcalfe (NVM) ratio.<\/span> It evaluates BTC\u2019s market capitalization relative to its network activity, <\/span>specifically<\/span> the number of active addresses. <\/span><\/p>\n

It employs <\/span>Metcalfe\u2019s<\/span> Law, a principle that suggests the value of a network is proportional to the square of the number of its users. <\/span>By applying<\/span> this principle, the NVM offers insights into whether the asset is overvalued or undervalued. According to CryptoQuant\u2019s data, the index is <\/span>currently <\/span>set<\/span><\/a> at<\/span> roughly 1.24, leaning toward a bearish outlook.<\/span><\/p>\n

Last but not least, we will touch upon the asset\u2019s profitability. The latest data <\/span>shows<\/span><\/a> that <\/span>a whopping<\/span> 99% of all BTC investors are sitting on some paper profits. 0% are underwater, whereas a mere 1% are break-even.
\n<\/span><\/p>\n

<\/a>BTC Profitability, Source: ITB<\/p>\n

While this might sound like good news for holders, it may <\/span>also<\/span> signal a short-term pullback. In October this year, nearly 95% of BTC\u2019s supply was in profit as the price surpassed $69K. Shortly after, though, a substantial correction caused the valuation to drop below $65.5K briefly<\/span>. <\/span>Similar scenarios were observed<\/span> in September and March.\u00a0<\/span><\/p>\n

Bonus: The Extreme<\/span>\u00a0Greed<\/span><\/h2>\n

One additional element that also hints at an incoming downturn for bitcoin\u2019s price is the Fear and Greed Index, which has <\/span>recently entered<\/a><\/span> \u201cextreme greed\u201d territory. This development indicates that the ongoing sentiment in the market is strongly bullish.<\/span><\/p>\n

However, \u201cextreme greed\u201d is sometimes associated with enthusiastic buying and a potential Fear of Missing Out (FOMO) effect. It may signal <\/span>a point<\/span> where BTC\u2019s valuation has reached a local peak just before experiencing a pullback.<\/span><\/p>\n

<\/a>BTC Extreme Greed, Source: alternative.me<\/p>\n

After all, one of Warren Buffett\u2019s investment advice states that people should be greedy when others are fearful and vice versa.<\/p>\n

The post 4 Reasons Why Bitcoin\u2019s (BTC) Price Might See a Short-Term Correction<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

TL;DR Certain on-chain metrics suggest overbought conditions, flashing the sell signal on BTC. The Fear and Greed Index is currently in the \u201cExtreme Greed\u201d zone, which could indicate a local top and a subsequent price decline. The Bearish Signals Bitcoin (BTC) has been the talk of the town recently. It entered a massive bull run […]<\/p>\n","protected":false},"author":0,"featured_media":20265,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-20264","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/20264"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20264"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/20264\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/20265"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}