Bitcoin price threatens drop as sell signals multiply amid lack of ETF news, raising concerns about the cryptocurrency’s long-term stability and investor confidence.
Bitcoin Price Shows Signs of Exhaustion, Potential Pullback Ahead
Bitcoin (BTC) price has recently generated multiple sell signals, both from a technical and on-chain perspective. These sell signals indicate a potential pullback and suggest that investors should exercise caution and control their bullish outlook for now.
One key factor that could impact Bitcoin’s price is the approval of a Bitcoin spot Exchange-Traded Fund (ETF). The US Securities and Exchange Commission (SEC) has been facing setbacks in crypto-related lawsuits, and the approval of a Bitcoin ETF is a highly anticipated event. However, until there are further updates on this front, BTC has been trading sideways.
Investors should be prepared for a retracement, considering the sell signals that Bitcoin price has been showing. The Relative Strength Index (RSI) indicates a bearish divergence, which often leads to a pullback or correction. Additionally, the Momentum Reversal Indicator (MRI) has flashed two sell signals, forecasting a potential downward movement.
Key support levels to watch for Bitcoin price are in the Fair Value Gap (FVG) area, ranging from $30,248 to $32,832, with its midpoint at $31,540.
On-chain metrics further support the bearish outlook. The Network Realized Profit/Loss (NPL) indicator shows significant profit-taking events, similar to previous instances when Bitcoin price experienced a crash. The Whale Transaction metric, which tracks transfers worth $100,000 or more, has also been increasing, suggesting that whales are likely booking profits.
The 30-day Market Value to Realized Value (MVRV) indicator, which measures the average profit/loss of recent BTC investors, has dropped from 16% to around 10%. This indicates that these investors could sell to realize their profits, potentially triggering a sell-off.
Overall, the outlook for Bitcoin price appears bearish, both technically and on-chain. Unless there are significant ETF-related developments, these sell signals suggest a potential pullback. However, if there is positive news regarding a Bitcoin ETF, the bearish thesis could be invalidated, and Bitcoin price could aim for the $40,000 psychological level.