The recent approval of a Bitcoin (BTC) ETF has been followed by a price correction, indicating a bearish trend for the leading cryptocurrency. However, new data suggests that this trend may soon change, potentially signaling positive developments for investors.
At the time of writing, Bitcoin was trading at $42,989.21 with a market capitalization exceeding $842 billion. A possible reason for the downtrend, besides ETF developments, could be BTC’s movement within a parallel channel, as highlighted by crypto analyst Ali Martinez in a recent tweet.
Martinez’s analysis suggests that BTC’s price could drop to $34,000 before potentially rallying to $57,000, gaining upward momentum. This raises the question for investors whether to wait for further price drops or to view the situation as a buying opportunity. Data from CryptoQuant indicates an increase in BTC’s exchange reserves, which could imply high selling pressure at the time of the report.
Bitcoin’s aSORP was also trending downward, which might mean more investors were selling at a profit. However, during a bull market, this could indicate the market is reaching its peak. Additionally, BTC’s network value to transactions (NVT) ratio spiked after a decline, historically correlating with market peaks and overvaluation periods, which could be seen as a bearish indicator.
Investors might be wise to wait for further BTC accumulation as the aforementioned metrics suggest more price drops could be forthcoming. The daily chart of BTC shows a similar picture, with the MACD indicating a bearish trend and the Relative Strength Index (RSI) below the neutral level, potentially increasing the likelihood of a continued downtrend.