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Tuesday, March 2, 2021

Is Bitcoin ‘Overbought’? Things To Look Out For Following The BTC Correction

As Bitcoin makes its way towards $60,000, analysts feel like there is a need to take some time to analyze the BTC surge with more caution and scrutiny. They further try to read into further inbound corrections yet to hit the coin in the near future.

Over the last weekend, the value of BTC soared past $55,000s to reach an all-time high of $58,000. The value peaked at $58,000 but soon afterward it began correcting downwards. BTC shaved $70 billion in this correction. So, how will investors feel if there were to be more such corrections in the future?

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Several analysts are of the opinion that the Bitcoin ‘bubble’ will soon be burst. Many have issued reports, warning investors of foreseeable corrections that will take the bloated value of Bitcoin further down. However, there are several reasons that are driving this bull run in the crypto market since the initial months of 2020.

Bitcoin Headed Towards A “Valuation Reset”

In the United States, especially, people turned their eyes towards the crypto market as an alternate economy that could provide a backup during a time when the economic markets were facing a major crash and the value of the US Dollar was at a risk. Everyone banked on the government relief aids to pull the market back up. However, analysts now claim that there has been enough cash inflow in the market. Now, the entire crypto market is headed towards a “valuation reset” that could lead to sharp corrections in the value of Bitcoin and other leading cryptocurrencies.

Analysts warn that the major signal of a pullback is the massive spike in exchange inflows. They clarify that inflows carry with them a risk of whale sell-offs. They further state that this is the best time for bulls to pull out of the market before it sinks from over-bloating.

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