Is Bitcoin overheating near $100K? 3 key areas to watch for
The post Is Bitcoin overheating near $100K? 3 key areas to watch for appeared on BitcoinEthereumNews.com.
Bitcoin has dragged itself back to the $98,000 price range. Its Funding Rate has remained positive for weeks. As Bitcoin [BTC] flirts with the $100,000 mark, questions arise about the sustainability of its current rally. While enthusiasm runs high among investors, several market indicators suggest that caution may be warranted. So, AMBCrypto has analyzed three critical areas to understand whether Bitcoin is entering an overheated phase. Bitcoin’s price momentum and overbought conditions The daily BTC/USD chart revealed Bitcoin’s sharp upward trajectory, as the king coin broke out from consolidation near $65,000 just weeks ago. The Relative Strength Index (RSI) stood at 78.6, indicating that Bitcoin was in overbought territory. Historically, RSI levels above 70 often precede short-term corrections as traders lock in profits. Source: TradingView Additionally, Bollinger Bands showed the price trading near the upper limit, hinting at increased volatility. With the 20-day moving average significantly lagging the spot price, a mean reversion could be on the horizon, especially if profit-taking accelerates. As of this writing, BTC was trading at around $98,200, a slight increase from the 97,000 price zone it dropped to in the last trading session. Bitcoin SOPR shows profit-taking The Spent Output Profit Ratio (SOPR) chart painted a clearer picture of market behavior. SOPR, which measures whether coins moved on-chain are in profit, has been steadily rising alongside Bitcoin’s price. AMBCrypto’s analysis showed that the SOPR values rose to around 1.08 during the past week, indicating heightened levels of realized profit. Source: Glassnode Historically, such elevated SOPR levels often coincide with local tops, as investors increasingly cash out during bullish euphoria. A sudden dip in SOPR would signal increased selling pressure, potentially triggering a broader correction. As of this writing, the spike has slightly dropped, and the BTC SOPR was around 1.04. An overleveraged market Another red…
Filed under: News - @ November 24, 2024 1:10 pm