Bitcoin spikes 10% in 7 days, but bears loom large

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Bitcoin [BTC] once again surprised investors with its bullish price action over the last week. Thanks to the uptrend, BTC finally managed to push its price over the $30,000 mark.

Bitcoin dominance hits highest point in over two years. pic.twitter.com/dj1nhS4Lyy

— Altcoin Daily (@AltcoinDailyio) October 22, 2023

Read Bitcoin’s [BTC] Price Prediction 2023-24

The hike in its value also pushed the king of cryptos’ dominance to the highest level in the last two years.

However, investors must exercise caution, as a few recent metrics suggest that BTC’s price might witness a price correction soon. Therefore, a closer look at Bitcoin’s health report could shed light on what to expect from the coin in the days to come.

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Bitcoin’s price rallied by more than 10% over the last week, allowing it to move above $30,000. According to CoinMarketCap, at the time of writing, BTC was trading at $30,735.06 with a market capitalization of over $599 billion.

Not only did the coin’s price increase, but its daily trading volume also surged by 23%, which by and large is a positive signal.

Thanks to the increment in its value, BTC’s 1-week price volatility went up. It was surprising to see that while BTC’s price took a northward path, its Social Volume declined. Its Weighted Sentiment also dropped sharply over the last few days.

Source: Santiment

A possible reason for the drop in BTC’s Weighted Sentiment could be that investors were expecting a price correction in the near term. In fact, a popular crypto analyst recently posted a tweet on X (formerly Twitter) highlighting a bearish indicator.

Notably, there was a head-and-shoulder pattern forming on BTC’s daily chart.

There's a lot of talk around a potential head-and-shoulders pattern forming in #Bitcoin daily chart. Let’s dissect it!

The $BTC daily chart hints at a possible sell signal emerging tomorrow, based on the TD Sequential indicator flashing a green 9 candlestick. Not to mention, the… pic.twitter.com/h7CiwRFcHb

— Ali (@ali_charts) October 22, 2023

The pattern hints at a possible sell signal, based on the TD Sequential indicator flashing a green 9 candlestick.

For the uninitiated, a head-and-shoulders pattern is a type of technical indication that consists of three peaks on the chart, with the middle peak being the tallest and the outside two being near in height.

Not only the pattern, but several metrics also suggested that BTC’s might witness a price correction. Its RSI went over 71 – an indication of rising selling pressure. Additionally, HyBlock’s data revealed that when BTC’s price reached near the $32,000 mark in July, its liquidation spiked.

As BTC’s price exhibited the possibility of reaching the same mark in the coming days, investors might see a hike in liquidation this time around as well.

Source: Hyblock Capital

CrypoQuant’s data also pointed out a few metrics, which showed that investors were already selling BTC. Notably, the king of cryptos’ Net Deposits on Exchanges was high, compared to the last seven-day average.

Its aSORP also turned red, meaning that more investors are selling at a profit. In the middle of a bull market, it could indicate a market top. Its Taker Buy/Sell ratio was in the red as well.

The metric clearly revealed that selling sentiment was dominant in the derivatives market. Interestingly, BTC’s Supply outside of Exchanges flattened last week. However, after a dip, its Supply on Exchanges moved up slightly, increasing the chances of a crossover in the coming days.

Source: Santiment

Another noteworthy metric was BTC’s Whale Transaction Count, which remained relatively high throughout the last week. Moreover, BTC’s Open Interest increased along with its price, which is generally an optimistic signal.

But this time, the metric reached the same level as that in July 2023, after which the coin’s price plummeted.

Source: Coinglass

A look at BTC’s press time chart provided a better understanding of whether investors should expect a short-term price correction. Most importantly, Bitcoin’s price touched the upper limit of the Bollinger Bands, which could cause a trend reversal.

Is your portfolio green? Check out the BTC Profit Calculator

The Chaikin Money Flow (CMF) also registered a downtick.

Nonetheless, the MACD displayed optimistic signs as it displayed a bullish crossover on 17 October. BTC’s Money Flow Index (MFI) was also resting comfortably above the neutral mark, increasing the chances of a continued price uptrend in the days to follow.

Source: TradingView

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