Bitcoin (BTC) Faces Potential Short-Term Corrections as Market Euphoria Fades

With Bitcoin (BTC) seemingly struggling to breach the $100,000 resistance, technical indicators point to a possible incoming correction.

Bitcoin (BTC) technicals hint at a possible correction below the $90,000 mark as the asset struggles to breach the key resistance at $100,000.

After hitting a new record high above $99,000 on November 22, Bitcoin has shown a sell signal on the 12-hour chart based on the TD Sequential indicator. This indicates a potential drop below the $90,000 level, as noted by Ali Martinez in his analysis on November 23.

In this scenario, key Fibonacci retracement levels could serve as potential downside targets, with the 61.8% Fib at $91,583 and the 78.6% Fib at $85,610.

However, there's still a chance for Bitcoin to invalidate this bearish signal. According to Martinez, if BTC closes above a critical resistance level of $100,535, the bearish setup will be canceled.

Bitcoin’s bearish outlook emerging

In another development, Scott Melker, host of The Wolf Of All Streets, highlighted a high probability of Bitcoin correcting below the $90,000 mark in an X post on November 2024.

He noted that the flagship cryptocurrency is showing signs of a potential local top, with significant bearish divergence forming on multiple timeframes along with an overbought RSI. Such setups have historically signaled price corrections, although no indicator can guarantee an outcome.

In the short term, Melker noted that the most likely pullback zones are around the low $90,000s to high $80,000s.

“Significant bearish divergence with overbought RSI on most time frames. Usually a clear signal of a local top, at the very least. <…> Most likely place for a pullback is the low 90s or high 80s,” he stated.

He added that it's crucial to note that Bitcoin's previous all-time high of $74,000 is yet to be tested as support, which could be interesting to watch.

Meanwhile, on-chain metrics indicate a potential sustained correction for Bitcoin below the $100,000 mark. There seems to be a growing presence of spoofing on trading platforms, where large walls of sell orders (ask liquidity) are strategically placed to push the market lower toward support levels.

This creates bearish sentiment, as these walls are often used to manipulate short-term price movements, contributing to the volatility below $100,000.

Amid the current market momentum, the overall sentiment remains bullish on Bitcoin hitting the next $100,000 resistance, despite the uncertainty about the asset's next move after this target.

While some anticipate a sharp correction, other analysts maintain that Bitcoin will likely target as high as $150,000.

For example, Caleb Franzen, founder of financial research resource Cubic Analytics, stated on November 23 that the asset could target $175,000 by 2025, adding that the current bull market is “right on schedule.”

On the other hand, technical indicators and historical price movement suggest that the premier digital asset might target the $135,000 level in December 2024.

Bitcoin price analysis

Bitcoin's price stood at $97,390 at the time of writing, showing a 1.1% decrease over the last 24 hours. On the weekly chart, BTC is still up over 7%.

In conclusion, Bitcoin faces potential short-term corrections, but the overall market sentiment remains bullish on claiming the $100,000 mark. However, with technicals indicating a possible pullback, bulls must aim to keep the asset's valuation above the $97,000 resistance.

Featured image via Shutterstock