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Bitcoin (BTC) is at risk of witnessing more corrections as it is on the verge of hitting a “top-heavy” zone, says a popular on-chain analyst.
The pseudonymous crypto trader known as Checkmate tells his 94,500 followers on the social media platform X that top-heavy zones happen when “too many people buy too many coins at too high of a price.”
“A critical question in these scenarios is ‘Ok, they are underwater, but by how much? How bad is it?’ Being underwater by -1% is very different to -20%.
On an Unrealised profit basis, Bitcoin short-term holders are at a key decision point. We’d expect a bounce here… but also a phase shift.”
Source: Checkmate/X
Checkmate encourages traders to pay attention to potential trigger points that could suggest a shift in sentiment.
“Whilst we’re not ‘Top Heavy’ yet, we’re on the cusp of moving into it. Chop-solidation remains my base case, and markets often have to go down before they go up again.
After 18 months of pure up-only price action, a period of several months of consolidating and correcting is not only expected but required. Don’t get shaken out folks, but that often requires managing near-term expectations.
Keep things in perspective. Stay Humble and stack sats.”
Source: Checkmate/X
BTC is trading at $60,541 at time of writing and is down nearly 5% in the past 24 hours.
Generated Image: Midjourney
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