Bitcoin (BTC) Got a Substantial Boost This Weekas US inflation levels for February were in line with market expectations. On March 14, the BTC/USD pair hit a 2023 high at $26,550 after hearing the news.
But while macroeconomic conditions may currently favor risk buyers, certain on-chain and market indicators point to a possible short-term correction.
BTC returns to exchanges as the price rises
On March 13, Glassnode’s exchange flow data recorded the most significant influx to exchanges since May 2022. This means more supply on exchanges and potentially more selling pressure.
The coin days indicator, which measures time-weighted bitcoin transfers, is also showing a small rally, indicating that old holders are moving coins around.. These indicators could indicate profit-taking by long-term holders, which could lead to a correction.
Bitcoin funding rates and RSI rise
Besides, the funding rate of bitcoin perpetual swaps also rises with the latest print of the Consumer Price Index. In other words, more traders are betting higher with leveraged positions, increasing the risk of a correction.
The strong price movement has also registered a significant spike in the Relative Strength Index (RSI), a technical momentum indicator, reading as high as 82. This means that the BTC/USD pair is generally considered “overbought” in the short term.
BTC/USD pair paints a bearish pattern
The BTC price is currently forming a widening wedge pattern, which represents the elevated level of volatility. Both buyers and sellers are pushing the price beyond support and resistance levels, and reversals are coming quickly.
Buyers failed to break the pattern on March 14 and are now facing resistance at its top of $26,700.. At the same time, there is a chance that the price will correct back towards the bottom of the pattern, around $19,500, in the coming days.
On the contrary, If the bitcoin price breaks above the upper trend line, the bulls are likely to rally to push the price towards $30,000. There are potentially welcome signs for bulls that this could happen.namely in the BTC options and futures markets.
As Cointelegraph reported, there is still room to run, as the indicators have yet to hit previous high levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
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