Bitcoin, the world's largest cryptocurrency, has been on a relentless upward trend, but analysts are now warning that a correction could be on the horizon.
Swissblock Warns Bitcoin Could Drop to $58K as Cooling Period Approaches
Swissblock, a digital asset analysis firm, suggested that Bitcoin's rapid rise may enter a period of pause and a potential drop to $58,000 is on the horizon.
Since late January, the price of Bitcoin has nearly doubled to all-time highs, with each dip quickly bought up by eager investors.
However, Swissblock analysts emphasized that there was an alarming divergence between Bitcoin's price and the relative strength index (RSI) and stated that a pullback may be imminent.
“Nothing rises in a straight line, not even BTC,” Swissblock analysts wrote in a recent Telegram update. “A countermovement seems imminent,” he says.
Swissblock's warning is based on technical analysis showing a negative bearish divergence, with the RSI on the 4-hour chart showing signs of weakening momentum as Bitcoin's price continues to rise.
This suggests that a cooling period may be necessary for the cryptocurrency to continue its upward trend.
According to Swissblock analyst Henrik Zeberg, the pullback could occur in the next few days. However, despite the short-term correction, analysts remain optimistic about Bitcoin's long-term prospects.
*This is not investment advice.
