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Post: Bitcoin Correction: Analyzing Profit Booking and Potential Dip

Bitcoin Correction: Analyzing Profit Booking and Potential Dip

Key Points:

  • Bitcoin is experiencing its first signs of profit booking but is finding support around $69,000.
  • The recent inflows into spot Bitcoin exchange-traded funds have slowed down significantly, hinting at a potential corrective phase.
  • Historically, during previous halving cycles, Bitcoin has seen corrections of up to 40%, with a potential drop to around $45,500 if history repeats.
  • The current pullback is mainly due to profit booking and has not resulted in panic shorting, which is a positive sign.

Bitcoin Facing Short-Term Pullback:

Bitcoin’s recent rally is encountering signs of a short-term pullback, despite the struggle by bears to hold the price below $69,000. The slowdown in inflows into Bitcoin ETFs on March 14 is seen as a contributing factor to this correction.

Potential Deep Correction in Bitcoin:

Looking at historical data from previous halving cycles, there is a possibility that Bitcoin could experience a substantial correction of around 40%, potentially dropping to $45,500 if past trends were to repeat.

Positive Tone Amidst Pullback:

Despite the pullback, there is optimism as the current correction is mostly attributed to profit booking on hedges, rather than panic selling, indicating a more stable market sentiment according to popular trader Skew.

Hot Take:

While corrections are common in bull markets, the resilience shown by Bitcoin amidst profit booking suggests a healthy market sentiment. Monitoring the levels around $45,500 will be crucial to gauge the depth of this potential correction and the market’s reaction.

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