Despite Bitcoin’s impressive rally over the past month, characterized by successive all-time highs, Swissblock analysts caution that a correction could be on the horizon. They note a negative divergence between Bitcoin’s price trajectory and the RSI momentum indicator, suggesting a loss of momentum in the market.
According to Swissblock, Bitcoin’s ascent from $38,000 in late January has been remarkably swift, lacking significant pullbacks along the way. However, the analysts believe that a counter move is imminent, emphasizing that “nothing rallies in a straight line, not even BTC.”
Based on their analysis of Bitcoin’s price action and RSI trends, Swissblock forecasts a potential 20% decline from current levels, with prices possibly dipping to the $58,000-$59,000 range in the coming days. Despite this anticipated pullback, Swissblock remains optimistic about Bitcoin’s long-term trajectory, expecting the uptrend to eventually resume and lead to new highs.
Echoing similar sentiments, analysts at Matrixport also suggest that Bitcoin’s rally may be losing steam, signaling a need for consolidation before another potential leg up. They emphasize the significance of monitoring the RSI, which could indicate the need for Bitcoin to stabilize before resuming its upward trajectory.
Additionally, the surge in meme coin prices raises concerns about market exuberance and potential profit-taking, as investors rotate funds from large-cap cryptocurrencies to riskier assets. Past instances, such as the rapid rise of pepe coin (PEPE) preceding a decline in Bitcoin’s price last May, serve as a reminder of the market’s cyclicality and the importance of cautious optimism.