After Breaking $60,000, Is Bitcoin Ready for a Correction Ahead of New ATH? BTC price analysis

After Breaking $60,000, Is Bitcoin Ready for a Correction Ahead of New ATH? BTC price analysis

BTC has shown strength recently, driven by anticipation of the futures-backed ETF and possible launch early next week. It closed at $61.6k with more than double the daily average volume on Coinbase, indicating strong spot buying.

Possible correction for BTC?

Although the short-term price performance has been very bullish with a strong breakout above $52.9K in the last 2 weeks, we must approach the launch of the BTC ETF with caution. The risk of a short-term pullback is increasing as BTC has surged 58% in just a few weeks in anticipation of the BTC ETF news.

Chart according to TradingView

In traditional markets, stocks tend to sell off before or on the day of the expected announcement as traders take profits. Bitcoin is not immune to the “buy the rumor, sell the news” pattern as we have seen many sell-offs, especially recently with El Salvador adopting BTC as legal tender.

The overall trend in fundamentals, technicals and on-chain metrics remains firmly bullish for BTC over the medium to long-term view, but it is important to keep an eye on the short-term risks.

Open interest, funding rates and the estimated leverage ratio are slightly elevated as BTC has recovered significantly in recent weeks. Although these levels are not as extreme as those seen in March-May 2021, there is always the risk of a liquidation event that could trigger a short-term pullback, especially if the BTC ETF turns into a sell event.

Chart according to TradingView

A sell-the-news event is actually healthy for the larger market structure as it helps make the rally toward all-time highs and higher more sustainable. Bull markets have multiple shake-outs where the structure is formed, making the overall rally more sustainable.

If this happens, nearby technical support is currently between $57.1K and $52.9K, previous resistance levels are now supported. It is crucial for BTC to hold these levels, form a higher low and push higher to reclaim $60,000 and retest previous all-time highs of $64.8k.

This appears to be the most likely outcome as on-chain metrics continue to show no signs of aggressive distribution from long-term holders. This is a very bullish signal and indicates that they are not interested in selling BTC even at $60,000.

BTC miners continue to hold reserves and maintain reserves, indicating that they still expect higher prices later this year. Spot foreign exchange reserves have been trending lower in recent days as heavy spot buying pushed BTC higher.

Long-term picture bullish for Bitcoin price

Although short-term caution is warranted following a major BTC rally, the medium to long-term trend remains entirely bullish, suggesting that any short-term selloff is likely to be accumulated by strong hands and form a higher low, leading to bullish continuation.

We continue to see signals of the risk of a trading return, a macro bullish catalyst for BTC for the cycle. The SPX has likely formed a double bottom, showing bullish divergence and now reclaiming key technical levels. The dollar remains below resistance as money continues to flow out of long-term bonds, a sign that money is returning to risk assets like stocks and Bitcoin.

Despite a possible short-term correction, strengthening fundamentals, technicals, on-chain and macro conditions continue to favor BTC amid the bull market cycle.

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