Bitcoin has recently experienced a positive performance after a significant decline in the first half of September. The rally began midweek following the Fed’s decision to reduce the benchmark interest rate by 50 basis points (bps), which turned out to be favorable for cryptocurrencies.
Interestingly, a few crypto analysts had predicted this rally using technical indicators. One such analyst is Ali Martinez, known for his expertise with the TD Sequential. However, in a surprising development, the analyst advised investors to “take some profits,” indicating the possibility of a price correction on the horizon.
Examining The Bitcoin Rally
Bitcoin, which faced difficulties gaining traction earlier this month, embarked on a robust rally that began midweek. This rally enabled Bitcoin to surpass the $63,000 mark once again and boost its market dominance. Additionally, the rally peaked at $63,830, representing an increase of around 20.77% from a low of $52,827 recorded on September 6.
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Yet, despite the current enthusiasm surrounding Bitcoin’s price movements, Martinez has issued a warning for investors. In a post on the social media platform X, Martinez noted that the TD Sequential, a tool he often uses for market trend analysis, is now suggesting the potential for a price correction near the $63,700 mark.
Martinez emphasized that the same TD Sequential indicator, which signaled a buy at $57,400 before Bitcoin’s recent surge, is now cautioning of a prospective pullback. This indicates that although the recent increase has been impressive, the market might be approaching a crucial point where prices could retract.
The TD Sequential indicated to buy #Bitcoin at $57,400, and now it is advising you to take some profits at $63,700! pic.twitter.com/0h1yNowkae
— Ali (@ali_charts) September 20, 2024
Should You Consider Selling?
Considering Bitcoin’s price trajectory since July, the $63,000 level, which served as an order block earlier this year, has largely become a resistance point during price rises. Nonetheless, while the TD Sequential points towards a possible price correction, Bitcoin bulls are still striving to validate a continued rally.
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According to a further analysis by Ali Martinez, Bitcoin is currently testing the 200-day SMA, which is a pivotal level for confirming bull trends. Historical data has shown that failing to break above the 200-day SMA often results in significant corrections. If this trend continues, it may lead to a downturn towards $40,000 before the year concludes.
Recent market trends and fundamentals indicate that Bitcoin has improved compared to previous periods. There are currently bullish factors within the ecosystem, such as Spot Bitcoin ETFs, that may mitigate a correction of this scale. Additionally, a positive monthly close in September could enhance the prospects for a fruitful ‘Uptober,’ continuing the rally in October.
Nevertheless, the $63,000 and 200 SMA at $63,900 are key levels to monitor for Bitcoin moving forward.
Featured image created with Dall.E, chart from Tradingview.com
