4 signs that $26,000 was the ceiling for Bitcoin

The Bitcoin price surged to $26,000 yesterday as inflation came in entirely as expected. Eventually, the price even reached a local peak of $ 26,550. While macroeconomic conditions seem to be slowly turning towards a favorable situation for Bitcoin, there are a number of other indicators that indicate that the party may already be over.

Stock markets are filling up

It seems that many Bitcoiners want to take advantage of the price increases to sell their coins. On March 13, people sent the largest amount of Bitcoin to the exchanges since May 2022. This means that more Bitcoin is available at the exchanges to sell, which can potentially create major selling pressure.

The so-called Coin Days Destroyed indicator also showed a small peak, which means that a relatively large number of old coins have been sent to the exchanges. Then it is about Bitcoin hodlers who have owned their coins for a relatively long time. In general, that does not bode well for the price.

Bitcoin funding rates and RSI up

The funding rate (costs) for Bitcoin perpetual swaps has also increased after the latest inflation figures from the United States. This means that more investors are currently betting on Bitcoin price increases with leveraged positions. Incidentally, this does increase the chance of a correction.

Funding rates for Bitcoin perpetual contracts. Source: Coinglass

Furthermore, Bitcoin’s RSI has risen to a score of 82, which generally means that Bitcoin is overheating right now. Overall, if the RSI is above 70, there is a relatively high probability of a correction, as the market needs to cool off from recent price increases. In that respect, a small correction would not be unnatural at all.

Bearish pattern on 4-hour chart

Also, if we look at the 4-hour chart of Bitcoin against the US dollar, we see that a fairly bearish pattern is currently unfolding for the digital currency. It is a so-called broadening wedgee, which you can see from the black lines in the chart below.

In a broadening wedge, both the bulls and the bears manage to pull the price further and further in their direction during rises and falls. It is to be hoped that Bitcoin will break out to the upside, but for now the price seems rejected around $26,700 and we may be testing the downside.

That bottom is around $19,500, so let’s hope that all goes well and we head back to the upside. Ultimately, technical analysis is not an exact science and fortunately offers no certainties with regard to the Bitcoin price.

Recent Articles

Related News

Leave A Reply

Please enter your comment!
Please enter your name here