Bitcoin has recently seen a notable pullback, dropping to $86,000 after peaking at an intraday high of $89,964. This downturn follows a period of robust upward momentum, driven by the U.S. election results and a buoyant market sentiment. However, market analysts caution that a correction may be imminent ahead of the Consumer Price Index (CPI) data release on November 13. Let’s delve deeper into the current market sentiment and potential future movements.
Expert Predicts 10% Retracement
Renowned analyst Michaël van de Poppe, founder of MNConsultancy, forecasts a 10% retracement in Bitcoin’s value before the CPI data is unveiled. He projects that the price might retreat to the 38.2% Fibonacci retracement level, aiming for a range between $75,669 and $81,193. Additionally, van de Poppe highlights $66,729 as a crucial support level, while $64,130 is identified as another potential area for liquidity extraction. This anticipated pullback is seen as a normal market adjustment before Bitcoin resumes its upward trend.
Furthermore, Binance co-founder Changpeng Zhao (CZ) has also issued a cautionary note, suggesting that Bitcoin’s all-time high levels could trigger significant volatility in the market.
Overbought Conditions Indicate a Correction
From a technical perspective, indicators suggest Bitcoin may be entering overbought territory. Currently trading above the upper Bollinger Band, Bitcoin often signals a consolidation or correction phase when this occurs. Moreover, the 14-day Relative Strength Index (RSI) stands at 75.20, surpassing the typical overbought threshold of 70. This indicates that Bitcoin might experience downward pressure or a short-term price correction in the near future.
Rising Retail Interest Signals Caution
Bitcoin continues to navigate above the $87,000 mark, with its current valuation at $87,455.04, despite a minor 1.34% dip in the last 24 hours. Its market dominance has climbed from 59.01% to 59.52%, although trading volume has decreased by 8.57%. With a market cap of $1.71 trillion, Bitcoin demonstrates resilience amid modest market corrections. Despite this, the rising price of Bitcoin has attracted increased retail interest.
Technical analyst Ali Martinez advises investors to remain cautious, noting that spikes in search activity for Bitcoin often align with subsequent price corrections. This surge in retail interest might imply that Bitcoin’s price could face further declines, as such interest frequently precedes a market cooldown.
While short-term corrections are anticipated, the long-term outlook for Bitcoin remains optimistic. Stay tuned for further updates as more data becomes available.
