Technical analysis

Bitcoin (BTC) Price Recovery Prompts Profit-Taking, with Fears of a Quick Drop

Over the past 24 hours, Bitcoin (BTC) has seen a 1.5 percent increase in its price, bringing it to approximately $26.6k in the early Asian market on Friday. The recent high-impact news events, including the release of US CPI and PPI data, have introduced significant volatility into the Bitcoin market, particularly in light of the FTX liquidation plan.

Nevertheless, historical warnings from crypto experts emphasize that a surge in bullish sentiment often precedes a market reversal. As a result, cryptocurrency traders are advised to exercise caution, especially during the weekend when volatility tends to spike across most digital assets.

Santiment, a market intelligence platform, has conducted an on-chain analysis of Bitcoin’s current situation. Their analysis indicates a high probability of a price correction due to increased profit-taking activity.

Notably, Santiment has observed that profit-taking in the Bitcoin market reached a two-month high over the past 24 hours, coinciding with the recent market spike. Interestingly, Santiment also highlights that Bitcoin continues to experience exponential growth in unique address activity despite the prevailing market uncertainty.

Furthermore, the Bitcoin network has maintained an average of 1.1 million addresses engaged in sending and receiving coins daily for the past five months.

BTC Price Analysis

Regarding price analysis, it is likely that Bitcoin’s price will continue its upward momentum in the coming days, aiming to reestablish the support/resistance zone around $27.2k. Additionally, Bitcoin’s dominance has recently broken a minor downward trend and reclaimed 50 percent following the recent surge. According to Benjamin Cowen, a respected quantitative crypto trader, Bitcoin has historically embarked on significant upward moves each time its dominance broke out of a falling trendline.


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