Bitcoin (BTC) is facing the possibility of experiencing further corrections as it approaches a “top-heavy” zone, according to a well-known on-chain analyst.
The pseudonymous crypto trader Checkmate, who has a following of 94,500 on the social media platform X, explains that top-heavy zones occur when “too many people buy too many coins at too high of a price.” He emphasizes the importance of understanding the extent to which investors are underwater, as a 1% loss is vastly different from a 20% loss.
Checkmate points out that short-term Bitcoin holders are at a crucial juncture in terms of unrealized profits, indicating the potential for a bounce but also a shift in market dynamics.
Encouraging traders to be mindful of potential trigger points for sentiment shifts, Checkmate notes that while the market is not yet “top heavy,” it is on the brink of entering that territory. He anticipates a period of consolidation and correction after 18 months of continual price increases, stressing the importance of managing short-term expectations and staying grounded.
At the time of writing, BTC is trading at $60,541, having dropped by nearly 5% in the past 24 hours.
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