Three reasons why the cryptocurrency market could be about to suffer one of the nastiest corrections in years


  • The cryptocurrency market has experienced a massive rally over the past few months.
  • Bitcoin price is near the all-time high at $20,000 for the first time since December 2017.

The cryptocurrency market seems to be stronger than ever and has seen a $250 billion increase in its market capitalization since the beginning of October. Bitcoin is currently trading at $19,000, on the verge of hitting a new all-time high. Other popular coins like Ethereum managed to crack $600 for the first time in two years and XRP had a colossal rally to $0.78. 

Three on-chain metrics indicate a potential pullback is nearby

The Crypto Fear & Greed Index chart shows that traders are extremely greedy right now at 94 points, the highest value since June 2019 when Bitcoin peaked at $13,970 but experienced a nasty retrace towards $8,215 only three months later. 

btc price

Crypto Fear and Greed chart

This is an indicator that the cryptocurrency market might be close to topping out. We can also observe another period of high greed throughout August 2020 when Bitcoin was trading at $12,468 before a notable pullback towards $10,000. This last pullback was notably weaker but still represented a 20% drop which would put Bitcoin at $15,000 at current prices.

btc price

BTC/USD weekly chart

Additionally, on the weekly chart, the TD Sequential indicator has just presented a sell signal for the first time since June 2020. This indicator has been reliable in the past as Bitcoin had a pullback of around 14% on June 1, 2020. It seems that both charts are pointing out a potential bearish price target of $15,000. The RSI is also overextended, adding even more strength to the signal. 

btc price

BTC MVRV chart

The MVRV chart is also reaching a dangerous zone above 12.8% which in the past was an accurate indicator of upcoming correction periods. Bitcoin would need to trade sideways for a substantial period of time to cool off these charts and invalidate the bearish outlook in the short-term.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

XRP Price Forecast: Ripple could be on the verge of a breakout to $0.40

After losing more than 60% of its value in December 2020, XRP has been trading sideways without much action throughout 2021. The SEC has sued Ripple alleging that it conducted illegal sales of XRP which they consider a security.

More Ripple News

Bitcoin price shows ambiguity as a 30% move is underway according to technicals

Bitcoin has been trading inside a tight range after establishing a new all-time high at $41,950. The digital asset plummeted down to $30,420 and then formed a lower high at $40,100 followed by what seems to be a higher low at $33,850. 

More Bitcoin News

XLM Price Prediction: Stellar awaits a massive breakout but remains inside a no-trade zone

XLM has continued to trade sideways since we last reported about it. The digital asset remains locked inside a tightening range which will eventually burst. Let’s analyze some of the most important indicators to understand the most likely scenario.

More Stellar Lumens News

Ethereum Price Analysis: ETH bulls facing an uphill task inside short-term triangle

ETH/USD steps back from short-term resistance while declining to $1,256 during early Tuesday. In addition to easing from the immediate triangle’s upper line, Ethereum also drops from a three day high by press time. Monthly top, one-week-old ascending trend line favor bulls.

More Ethereum News

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: BTC price faces extreme volatility ahead of a new all-time high

Bitcoin had a wild run this week, dropping from a high of $41,350 to a low of 30,420 in less than 48 hours. 

Read the weekly forecast

BTC

ETH

XRP