US CPI Data Today: Bitcoin’s Overbought Conditions Could Lead to 10% Correction

The post US CPI Data Today: Bitcoin’s Overbought Conditions Could Lead to 10% Correction appeared first on Coinpedia Fintech News

Bitcoin recently experienced a significant pullback, dropping to $86,000 after reaching an intraday high of $89,964. This decline follows a strong upward trend, fueled by the U.S. election results and a surge in market sentiment. However, analysts are now warning of a potential correction before the release of the Consumer Price Index (CPI) data on November 13.

The fresh inflow in the crypto market seems to be a warning for a short-term correction, as the CPI report may further break this upward move. Let’s dive in to understand the market sentiments.

Expert Predicts 10% Retracement

Michaël van de Poppe, the founder of MNConsultancy, anticipates a 10% Bitcoin retracement before the CPI data is released. He suggests that the price may pull back to the 38.2% Fibonacci retracement level, targeting a range between $75,669 and $81,193. Van de Poppe also points to $66,729 as a key support level to hold, and $64,130 as another potential area for liquidity to be taken out. This pullback, he believes, would be a natural market movement before Bitcoin resumes its upward trajectory.

Notable, Binance co-founder Changpeng Zhao (CZ) warned last week that Bitcoin’s all-time high might cause major volatility. 

Overbought Conditions Indicate a Correction

Technically it suggests that Bitcoin may be entering overbought territory. The cryptocurrency is currently trading above the upper Bollinger Band, which often signals that the asset is due for a consolidation or correction phase. Plus, the 14-day Relative Strength Index (RSI) stands at 75.20, surpassing the standard overbought threshold of 70. This suggests that Bitcoin could face downward pressure or a short-term price correction in the coming days. 

Rising Retail Interest Signals Caution

Bitcoin is cruising above $87,000, currently sitting at $87,455.04, despite a slight 1.34% dip in the last 24 hours. Its market dominance has risen from 59.01% to 59.52%, even with a decrease in trading volume of 8.57%. With a market cap of $1.71 trillion, Bitcoin continues to show resilience amid small market corrections. Despite this, Bitcoin’s price continues to rise, with a noticeable increase in retail interest. 

Technical analyst Ali Martinez has cautioned investors, noting that heightened search activity for Bitcoin often correlates with price corrections. This surge in retail interest may signal that Bitcoin’s price could face further declines as it often precedes a market cooldown.

Despite the potential for short-term corrections, the long-term outlook for Bitcoin remains bright. Stay tuned for updates.