3 Bitcoin price indicators indicate temperature conditions and BTC correction
Bitcoin (BTC) price hit a new high of $72,800 on March 11, demonstrating the strength of the crypto market.
According to data from Cointelegraph Markets Pro and TradingView, BTC opened at $69,032, up 5.7% to hit a New Year's high of $72,850 on Monday, March 11.
This incredible performance of Bitcoin has raised concerns about a sell-off fueled by high levels of profit-taking.
Here are three technical and market indicators that point to a BTC price correction in the short term.
The TD series indicator flashes a sell signal on the 12-hour time frame.
Independent analyst Ali observed the price of BTC trading above $71,700, warning that a reversal of short-term traders may occur.
Ali released the following chart showing that the TD series indicator has sent a sell signal on BTC's 12-hour chart.
“Since early February, the price of $BTC has dropped 1.6% to 3.5% every time this indicator has offered to sell. This trend is something short-term traders should watch closely!”
The TD Sequence Indicator is a dynamic trend-following chart overlay indicator used to determine short-term trend changes based on intraday highs and lows.
In this case, the indicator predicts that the price of BTC may fall from the current level, it will decrease by 3.5%, to trade at $ 70,000.
Bitcoin Price Shows “Signs Of Overheating”
Bitcoin prices have been in an “up only” trend since January 23, after the spot Bitcoin ETFs' “sell-news” effect faded. These new BTC investment funds have seen significant capital inflows since their launch on January 11, with assets under management reaching $55.3 billion as of March 11.
This led to the appearance of “signs of overheating” in the Bitcoin market. Analysts at CryptoQuant are warning that BTC may experience major corrections soon, despite probing new all-time highs.
On March 8, a blockchain analytics firm released a series of posts on X's social network showing metrics supporting “overheating.”
The company cites another metric that shows miners are being overpaid, when profits hit their highest level since December 2023.
“Miners are now considered highly overvalued, with profitability reaching the highest level since December 2023.”
CryptoQuant also highlighted that traders' unrealized profit margin reached 57%, which is historically associated with recent corrections that traders are bound to book profits in the long term.
“Furthermore, short holders have started selling at high profit margins since February 2021, which may herald an increase in selling pressure,” CryptoQuant added.
Related: BTC Price Increases by $70K — 5 Things to Know in Bitcoin This Week
Meanwhile, data from IntoTheBlock shows that 100% of Bitcoin holders have made 100% profits, increasing the possibility of short-term profit-booking sales.
Bitcoin's RSI is overbought on multiple time frames.
Coinglass' heatmap shows that the BTC RSI is showing overbought conditions in four out of five timeframes. Higher intervals indicate higher RSI values. Bitcoin's RSI is currently at 88.34 on the weekly, 79.34 on the daily, 74.81 on the four-hour, and 70.74 on the hourly basis.
This is confirmed by data from TradingView, which shows BTC's RSI at 89.2, 79, 72 and 70 on the weekly, daily, 12-hour and four-hour time frames respectively.
Overbought conditions generally describe recent movements in asset prices, and reflect the expectation that the price trend is likely to correct in the near future.
Additional data from Alternatives, a platform that tracks “sentiments and sentiments” around Bitcoin, showed the Crypto Fear and Greed Index at 82 – “Extremely Greedy” conditions.
Alternative notes, “When investors get too greedy, the market has to correct. Note that the last time this index was above 80 was at the height of the 2021 bull market when BTC fell from its then high of $69,000 before the 2022 bear market dropped to $15,000.
Although these indicators alert market participants to manage risks, it is important to note that RSI conditions do not guarantee a trend reversal. Crypto prices are very volatile, and BTC may continue to rise, with demand increasing and supply halving in the future.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
