Bitcoin’s Latest Wobble: A Romp Through the Charts or a Prelude to a Dramatic Fall?

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  • Our dear Bitcoin, it seems, is flirting with the notion of reaching a local pinnacle, with those pesky momentum indicators whispering tales of overextension. 📈
  • One cannot help but wonder, is the grand pullback on the horizon? đŸ€”

On a day not so long ago, the2nd of March, our beloved Bitcoin [BTC] embarked on a most spirited rally, surging by a daring9.44% in a single day – a feat unmatched in three months!

As the4-hour RSI ascended to the lofty heights of70, the market’s capricious nature reversed course, leading to a rather dramatic14.13% decline to $81,500 within a mere10 trading sessions. 📉

The last such inflow of capital was witnessed during the election run, a time when BTC soared to its then-all-time high of $88,400 on the11th of March, propelling the4-hour RSI into the perilous realm of overbought territory.

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Despite the ominous reading, the bulls, ever valiant, absorbed the sell-side liquidity, purged the market of weak hands, and propelled BTC to a glorious peak of $92,647 but two days later. 🐂đŸ’Ș

​Moving forward, the Relative Strength Index (RSI), a most insightful momentum oscillator, measures the velocity and alteration of price movements on a scale from0 to100.

Traditionally, an RSI exceeding70 suggests that an asset may be overindulging in its own success, hinting at the potential for a price pullback, whilst an RSI below30 implies it may be unappreciated, indicating a potential for a price rebound.

Historically, when Bitcoin’s4-hour RSI ventures into overbought territory, it signals a bullish fervor, yet has often been the harbinger of sharp price corrections.

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Now, three months hence, Bitcoin has reclaimed the $88k threshold for the first time in17 days. Yet, on the4-hour chart, the RSI has once more surged near80. 🚀

With the likelihood of profit-taking looming large, can the bulls muster the strength to absorb the sell-side pressure, or is another March-style correction imminent? đŸ€ž

Bitcoin poised for a pullback

Our astute friends at AMBCrypto have uncovered a most intriguing pattern. On the12th of March, as Bitcoin’s RSI signaled overextension, Bitcoin ETFs registered their second-highest inflow – a staggering $1.114 billion.

This revelation suggests that sustained institutional demand played a pivotal role in cushioning the impact of120,761 BTC, valued at $10.67 billion, that inundated exchanges in a single-day sell-off. đŸ’ŒđŸ’°

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As of this writing, Binance spot demand remains robust, with net outflows indicating continued Bitcoin accumulation. The derivatives market, too, reflects a bullish disposition. 📊

Meanwhile, both long- and short-term SOPR (Spent Output Profit Ratio) have flipped above0, affirming that holders are now basking in profit. đŸ€‘

However, with Bitcoin’s4-hour RSI in an overbought territory, the pressure for profit-taking could escalate, potentially triggering short-term volatility. For Bitcoin to ascend toward $90k, sustained buying momentum is of the essence. 💾

Yet, with “reciprocal” tariffs set to take effect on the2nd of April, market uncertainty looms large. Should resistance hold firm, a corrective move toward the $82k–$83k range appears a likely prospect in the near term. 🎱

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2025-03-25 17:19