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Bitcoin well done a few days ago after experiencing a sharp decline in the first two weeks of September. The rally started in the middle of this week after a day The Fed decided to cut the benchmark interest rate by 50 basis points (bps), a move that has proven positive for cryptocurrencies.
Notably, this rally has already been predicted by several crypto analysts using technical indicators. One such is Ali Martinez, TD Sequential master. However, in an interesting turn of events, the analyst has highlighted the case that investors have “booked some profit,” which is a sign of a potential price correction.
Analyzing the Bitcoin Rally
Bitcoin, which struggled to gain momentum at the beginning of the month, entered a strong rally that began to take shape during the week. This rally saw Bitcoin break above $63,000 again to increase its dominance in the markete. Furthermore, the rally rose to $63,830, representing an increase of about 20.77% from the September 6 low of $52,827.
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However, despite the current optimism surrounding Bitcoin’s price action, Martinez issued a word of caution to investors. In a post shared on social media X, Martinez emphasized that the TD Sequential, a tool he often uses to analyze market trends, is now showing the potential for a price correction near the $63,700 level.
Martinez pointed out that the same TD Sequential indicator, which flashed a buy signal at $57,400 before the recent Bitcoin rally, is now warning of a possible reversal. This suggests that although the recent increase has been significant, the market may be approaching a critical point where prices may recover.
TD Sequential told you to buy #Bitcoin at $57,400, and now tells you to book some profit at $63,700! pic.twitter.com/0h1yNowkae
– Ali (@ali_charts) September 20, 2024
Is It Time To Sell?
If we look at the price action of Bitcoin since July, $ 63,000, which served as an order at the beginning of the year, served more as the beginning of the resistance level during the price increase. However, while the TD Sequential indicates a potential price correction, Bitcoin bulls are still testing confirmation of the ongoing rally.
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In accordance with another analysis by Ali Martinez, Bitcoin is now testing the 200-day SMA, which is an important level to confirm a bull run. History has shown that failure to cross the 200-day SMA has led to significant corrections in the past. If history were to repeat itself, this could lead to a correction of up to $40,000 before the end of the year.
Recent market volatility and fundamentals have shown Bitcoin is now in a better place than ever. Now there are bullish catalysts within the ecosystem, such as Spot Bitcoin ETFs, which can prevent a correction of such magnitude. And, a green every month close in September it can pave the way for a better green ‘Uptober’, leading to a further rally in October.
However, the price levels of $63,000 and 200 SMA $63,900 are important to watch for Bitcoin going forward.
The featured image was created with Dall.E, a chart from Tradingview.com