Bitcoin has been strongly corrected since last weekend’s $ 24,300 highs. The leading cryptocurrency is currently trading at $ 22,600, but dropped to $ 21,800 24 hours ago.

BTC is down 5% in the last 24 hours. Bitcoin is outperforming most cryptocurrencies, which seem to be declining due to strong dominance. This dominance move may have been triggered by the rumor that the US SEC will finally take legal action against Ripple over XRP.

Analysts think Bitcoin may have formed a local to medium-term high after last weekend’s spike.

Related reading: This is why Ethereum’s DeFi market can be near a bottom

Bitcoin is likely to top in the near medium term

Bitcoin may have hit a mid-term high after hitting a high of $ 24,300 over the past weekend, some analysts have said.

The chart below was recently shared by a leading trader. It shows that Bitcoin may have topped out in the medium term thanks to a sharp rise in the weekly relative strength index (RSI) and the stochastic RSI. Both indicators are currently in extremely overbought territory, suggesting a downturn for this market is imminent.

Of course, as the trader notes, these indicators can remain overbought for an extended period of time. They just showed him it’s okay to be careful about further lungs in the current environment:

“Weekly RSI and Stoch RSI significantly overbought. It’s been a trending market and oscillators can remain overbought – but I’m just careful here…. Local top? “

Chart of BTC's price action over the past few years with an analysis by crypto trader "TraderXO" (@Trader_XO on Twitter).

Source: BTCUSD from TradingView.com

Related reading: Tyler Winklevoss: There will be a “Tsunami” of capital for Bitcoin

Strong basic principles

While Bitcoin’s price action is weak, the fundamentals on the chain remain strong. Rafael Schultze Kraft, Glassnode’s CTO, recently noted that as the number of BTC on exchanges decreases, he thinks there is a liquidity crisis on the supply side:

“#Bitcoin is in a supply and liquidity crisis. This is extremely bullish! And greatly underestimated. I think we will see this significantly reflected in the price of Bitcoin in the coming months. Let’s take a look at the data. “

Chart of BTC's price action over the past decade with an on-chain analysis of BTC on exchanges from Rafael Schutlze Kraft, CTO of Glassnode 
Chart from Glassnode, a crypto data source

Analysts believe that further accumulation by long-term investors will only force Bitcoin higher over time.

Related reading: 3 BTC On-Chain Trends Show Macro Bull Market Is Brewing

Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
Analyst: BTC Could Be Forming a Local Top as Indicators Overbought