Bitcoin Price Surge Hints at Market Correction Amidst Bullish Outlook from Fidelity

The price of Bitcoin has surged 5% this week, reaching $66,536 as of April 23rd. Fund manager Fidelity now regards the currency as "no longer cheap" and revised its medium-term outlook from positive to neutral due to indicators suggesting an accumulation of selling pressure.

Bitcoin Price Surge Presages Market Correction, Amidst Bullish Outlook from Fidelity

In a recent surge, the Bitcoin (BTC) price has skyrocketed by 5% over the past week, reaching an impressive $66,536 as of 02:30 a.m. EST. This upward momentum follows a modest 0.5% gain in the past 24 hours.

Fidelity Reevaluates BTC Outlook

Amidst this price surge, fund management giant Fidelity has revised its medium-term outlook on Bitcoin from positive to neutral after the first quarter (Q1). This cautious stance stems from several indicators suggesting an accumulation of selling pressure.

Fidelity's Signals Report employed the Hashrate Yardstick metric, akin to the price-to-earnings ratio in stock analysis, to gauge BTC's value. The firm's director of research, Chris Kuiper, expounded on this decision in an X post on April 23rd.

Long-Term Holders Fuel Selling Pressure

Fidelity also noted a surge in selling pressure from long-term holders and reported that 99% of Bitcoin addresses currently hold a profit. Despite these bearish signals, Fidelity maintains a bullish outlook on BTC and highlighted multiple price levels that continue to hover above a "golden cross" on the BTC/USDT chart. This bullish sentiment is reinforced by BTC's consistent trading above the 50- and 200-day moving averages throughout Q1.

Analyst Predicts Decelerating Bullish Cycle

Noted crypto trader and analyst @rektcapital expressed concerns that the bullish cycle could lose momentum if BTC continues its current consolidation between $60,000 and $70,000 post-halving. This analysis follows the BTC halving on April 20th, an event that typically triggers a bullish surge.

Bitcoin Transaction Fees Decline

Data indicates that Bitcoin transaction fees have witnessed a significant reduction, dropping from 128.45 to 24.99 between halving day and Tuesday, April 23rd. This represents a remarkable 80.5% decline in just three days.

Technical Indicators Signal Potential Correction

While BTC maintains a bullish bias, technical indicators hint at a potential correction. The Moving Average Convergence Divergence (MACD) suggests a possible sell signal, while the Awesome Oscillator (AO) displays a succession of bearish histogram bars. A lower high in the Relative Strength Index (RSI) could further indicate a trend reversal.

Bullish Scenario

A candlestick close above the ascending trendline could propel BTC towards reclaiming its $73,777 peak. In an extremely bullish scenario, BTC could surpass this cycle top and establish a new peak price exceeding $74,000.

Bearish Scenario

Conversely, a decline in BTC price could lead to a drop to $60,805 or even lower, potentially plunging to $59,005, as indicated by the intra-day low of the March 5th trading session.

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