Bitcoin (BTC) price is down 5% over the last 24 hours to trade at $41,645 on Dec. 11. Despite the sharp price correction, technical indicators and on-chain data show that Bitcoin still displays strength as bulls strive to push the price back above $44,000.
On-chain data shows Bitcoin price “over-extended”
Bitcoin dropped as much as 7.2% falling to $40,300 on Coinbase, triggering a conversation among analysts. Julio Moreno, head of research at on-chain analytics firm Cryptoquant said that the price of the flagship cryptocurrency was “overheating after the recent rally above” the $40,000 psychological level.
Some metrics are flagging #Bitcoin price is overheating after the recent rally above $40K (red areas).
1. The Bull-Bear Market Cycle Indicator: overheated bull phase for the first time since July.
2. The miner profit/loss sustainability: block reward growing much faster than… pic.twitter.com/irpVvBSV3G
— Julio Moreno (@jjcmoreno) December 7, 2023
More data from on-chain data analysis firm Lookintobitcoin highlighted exhaustion among bulls. According to its December 2023 report, the Bitcoin price has reached its golden ratio multiplier near-term target, highlighted by the Crosby Ratio, which shows Bitcoin’s near-term price at “over-extended levels” resulting in the need to correct, or at least slow down.
The golden ratio multiplier is an indicator that explores Bitcoin’s adoption curve and market cycles to understand how the price may behave in medium to long-term time frames.
Bitcoin Crosby Ratio Chart. Source: Lookintobitcoin
In other words, the Bitcoin price reached overbought conditions above $40,000 as buyer exhaustion set in. Note that the flagship cryptocurrency’s relative strength index (RSI) showed that the price has been massively overbought over the since Dec, 5.
BTC/USD daily RSI chart. Source: TradingView
This is an early sign that buying pressure could eventually diminish as traders saw the rally running out of steam and potentially chose to book profits.
Bitcoin price faces stiff resistance around $44,000
The ongoing correction in the Bitcoin market is due to the stiffness of…
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