Bitcoin Faces Correction Risk Ahead of Crucial US CPI Data Today

Bitcoin recently faced a significant pullback, dropping to $86,000 after reaching an intraday high of $89,964. This decline follows a strong upward trend fueled by the U.S. election results and rising market sentiment. However, analysts are now warning of a potential correction ahead of the Consumer Price Index (CPI) data release on November 13.

The fresh inflow into the crypto market could be a sign of a short-term correction. With the CPI report just around the corner, analysts believe it could slow down Bitcoin’s upward movement.

Let’s take a closer look at the market sentiment and what it means for Bitcoin’s price.

Expert Predicts 10% Pullback

Michaël van de Poppe, founder of MNConsultancy, expects a 10% retracement for Bitcoin before the CPI data is released. He suggests that Bitcoin’s price could pull back to the 38.2% Fibonacci retracement level, targeting a range between $75,669 and $81,193. He also notes that $66,729 is an important support level, with $64,130 potentially acting as another area for liquidity to be taken out.

Van de Poppe believes this correction would be a natural market move before Bitcoin resumes its upward trend.

Binance co-founder Changpeng Zhao (CZ) recently warned that Bitcoin’s approach to its all-time high could cause major volatility. His caution highlights the uncertainty in the market and suggests that price swings could intensify in the near term.

Overbought Signals Trouble

Technically, Bitcoin seems to be entering overbought territory. The cryptocurrency is trading above the upper Bollinger Band, a signal that often points to consolidation or a correction. Additionally, the 14-day Relative Strength Index (RSI) stands at 75.20, well above the 70 threshold that typically signals overbought conditions. These indicators suggest that Bitcoin could face downward pressure or a short-term price correction soon.

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Bitcoin Market Analysis

Currently, Bitcoin is holding steady above $87,000, priced at $87,455.04, despite a slight 1.34% dip in the last 24 hours. Its market dominance has increased from 59.01% to 59.52%, even as trading volume has decreased by 8.57%. With a market cap of $1.71 trillion, Bitcoin continues to show resilience in the face of minor market corrections. Moreover, a noticeable rise in retail interest suggests that demand for Bitcoin remains strong.

Technical analyst Ali Martinez has pointed out that a rise in retail interest often precedes price corrections. He notes that increased search activity for Bitcoin can be a sign that the market is gearing up for a cooldown. This surge in interest may indicate that Bitcoin’s price could face further declines in the short term.

Despite the potential for short-term corrections, the long-term outlook for Bitcoin remains bright. Stay tuned for updates.