Bitcoin Price Analysis: BTC Faces Significant Correction Below $70K, What’s Next?

Bitcoin’s price has undergone a substantial correction following a period of strong upward movement.

C.W.Morton

Mar 17, 2024

Bitcoin’s price has undergone a substantial correction following a period of strong upward movement.

Source : FlexFlip Generated image. Prompt : BTC Massive Correction

It experienced a recent decline of approximately 10%, prompting speculation among market participants about the possibility of a deeper downturn.

The Daily Chart

Upon observing the daily chart, it’s evident that the price has been on an upward trend for the past few months, consistently establishing higher highs and lows. However, Bitcoin encountered resistance around the $75K mark, leading to a downturn below the $68K support level.

Despite this, there remains notable support around $60K, which may prevent a further crash. Additionally, recent readings of the Relative Strength Index (RSI) indicate a clear bearish divergence, suggesting the potential for an extended correction phase.

The 4-Hour Chart

A closer look at the 4-hour chart reveals a more distinct price action pattern. Bitcoin reached a peak below $75K and is currently testing the $68K support area. A break below this support level could lead to a continued decline towards $60K in the short term.

Confirming this, the RSI is below the 50% mark, indicating a shift towards bearish momentum and increasing the likelihood of further downward movement.

While Bitcoin’s price has begun to retreat after reaching new all-time highs, it’s essential to assess the fundamental factors underlying the network to understand the reasons behind this development. One such metric is the Bitcoin Short-Term Holder Spent Output Profit Ratio (STH SOPR), which measures the ratio of profit realization among holders who have held their coins for less than 155 days.

Values above one suggest profit realization, while those below one indicate losses. Analysis of the STH SOPR chart reveals a new record high, suggesting that short-term holders are actively realizing their profits.

Their selling activity has likely contributed to the recent price decline. As long as this selling pressure persists, the price could continue to decrease in the weeks ahead.