The Bitcoin (BTC) price has risen by 1.5% in the past 24 hours, reaching $26.6k in the early Asian market on Friday. However, experts warn that this surge in bullish sentiment could be a sign of a market reversal.
The recent high-impact news events, including the release of US CPI and PPI data, have introduced significant volatility into the Bitcoin market. The FTX liquidation plan has also added to the uncertainty.
Don’t Get Excited Too Soon
Nevertheless, historical warnings from crypto experts emphasize that a surge in bullish sentiment often precedes a market reversal. As a result, cryptocurrency traders are advised to exercise caution, especially during the weekend when volatility tends to spike across most digital assets.
In an effort to better understand Bitcoin’s current state, Santiment, a market intelligence platform, has undertaken a comprehensive on-chain analysis. Their findings point toward a heightened likelihood of a price correction due to a noticeable increase in profit-taking activity.
Notably, Santiment has observed that profit-taking in the Bitcoin market reached a two-month high over the past 24 hours, coinciding with the recent market spike. Interestingly, Santiment also highlights that Bitcoin continues to experience exponential growth in unique address activity despite the prevailing market uncertainty.
Additionally, the Bitcoin network has consistently maintained an average of 1.1 million addresses actively engaged in sending and receiving coins each day for the past five months.
Regarding price analysis, it is likely that Bitcoin’s price will continue its upward momentum in the coming days, aiming to reestablish the support/resistance zone around $27.2k. Additionally, Bitcoin’s dominance has recently broken a minor downward trend and reclaimed 50 percent following the recent surge.
According to Benjamin Cowen, a respected quantitative crypto trader, Bitcoin has historically embarked on significant upward moves each time its dominance broke out of a falling trendline.
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Cryptocurrency traders are advised to exercise caution, especially during the weekend when volatility tends to spike across most digital assets.
What do you think? Is Bitcoin poised for a correction, or will the bulls continue to push the price higher?
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