Bitcoin (CRYPTO: BTC) is hovering near $121,000, with its daily chart showing several warning signs historically associated with meaningful corrections.
What Happened: In a detailed X post, crypto chart analyst Ali Martinez highlighted that the TD Sequential indicator has issued a sell signal, a pattern that has reliably preceded past pullbacks.
For context, a TD Sequential sell on July 14 preceded a 7% drop, while the signal on Aug. 13 led to a 13% decline.
Supporting this, other overbought indicators point to potential exhaustion: the Relative Strength Index (RSI) recently touched 74.21, and the Chande Momentum Oscillator peaked at 100.
Historically, when these readings aligned with TD Sequential sell signals, Bitcoin experienced significant retracements, suggesting current momentum may be unsustainable and traders should prepare for a possible pullback.
Also Read: Bitcoin, Ethereum, XRP, Dogecoin Face Selling Pressure — What To Watch On Thursday
Why It Matters: Trader KillaXBT offered a contrarian perspective, noting that Bitcoin’s current market psychology mirrors past bear-market structures, but in reverse. Presently, BTC occupies a position analogous to $16,000–$20,000 in previous cycles, only flipped upside down.
At this stage, selling feels counterintuitive, like how buying felt risky during prior rallies. Yet, the crowd chasing the final stages of the current surge often ignores earlier opportunities, creating conditions where disciplined traders can capitalize on predictable human behavior.
The broader takeaway is that Bitcoin’s market moves are as much about human emotion as technical, the advantage lies in letting the crowd outthink itself.
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