Bitcoin (BTC) is experiencing a period of overheating, with calls for a pullback to allow fresh liquidity into the market. The cryptocurrency’s price currently stands at $34,370, showing a slight decrease in value over the past 24 hours. However, it is still up 0.4% in the last seven days, 21% in one month, and 66.6% in the last year. Declining volatility levels and large trades favoring bearishness are believed to be causing the current market doldrums.
Although optimism for Bitcoin spot exchange-traded funds (ETFs) remains high, discussions and hype around the topic have significantly decreased. Trading volume has also slumped, with BTC recording only $13 billion in the last 24 hours. Despite this, Bitcoin ETF tickers continue to appear on the Depository Trust & Clearing Corporation (DTCC) website, with Invesco Galaxy Bitcoin ETF being the latest addition.
Bitcoin’s price is currently shaky above the $34,000 support level. The Relative Strength Index (RSI) indicates that the cryptocurrency is heavily oversold. After reaching highly oversold conditions in August at 18, the RSI entered the overbought region last week but topped out at 87. A gradual correction seems to be gaining momentum, with the RSI expected to enter the neutral area below 70 by the end of the week.
Crypto analysts and investor Rekt Capital agree that Bitcoin is consolidating below resistance at $35,000. They predict a minor dive and retest of support at $33,000 following the upcoming Federal Open Market Committee (FOMC) decision on interest rates in the US. Traders are advised to prepare their entry positions in that area as the next target is projected to be $36.5-$37k.
Blockchain data analytics platform CryptoQuant warns that BTC is approaching an overheating zone, suggesting the possibility of a retracement before the next significant increase. The spike in geopolitical tensions due to the ongoing war between Israel and Hamas is elevating Bitcoin as a safe haven asset. Discussions around Bitcoin becoming a safe haven are occurring ahead of the Federal Reserve’s monetary policy meeting, where rates are expected to remain unchanged.
In conclusion, while Bitcoin’s price is currently overheating, a pullback may be necessary to allow fresh liquidity into the market. The decline in volatility and bearish trading sentiment have contributed to the current market doldrums. Although optimism for Bitcoin ETFs remains high, trading volume has decreased. Bitcoin’s price is shaky above the $34,000 support level, with a gradual correction expected. BTC is approaching an overheating zone and discussions about its status as a safe haven asset are increasing amid geopolitical tensions.
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