Bitcoin's price surge to $65,497 has surprised many investors, as expectations for September leaned towards bearish. This article analyzes on-chain metrics that suggest a potential brief correction for Bitcoin.
The price Daily Active Addresses (DAA) divergence signals that Bitcoin could experience a drop before retesting the $70,000 mark. Currently, Bitcoin’s price DAA has dropped to -54.89%, indicating reduced user engagement and serving as a potential sell signal.
The DAA metric shows whether increased user interaction aligns with rising prices. When both rise, it signals a strong buy trend. However, the recent decline in DAA suggests a weakening uptrend for Bitcoin.
On September 16, 79.92% of Bitcoin holders were profitable. Now, 91.97% are in the money based on the Historical In/Out of Money (HIOM) metric. Historically, such high levels lead to profit-taking, often resulting in price declines.
For instance, in July, when 93% of holders were profitable, Bitcoin's price later dropped significantly. Similar patterns were observed in August, indicating that a pullback could be imminent.
As Bitcoin approaches critical resistance at $65,838, a drop below $65,000 could trigger further declines. Buyers may defend support at $63,093, but the potential for a price decrease to $60,348 exists.
If Bitcoin closes above $65,838, bulls may regain control, potentially pushing the price towards $68,236.
