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Bitcoin sell-off alert: reliable indicator warns of imminent correction

Bitcoin sell-off alert: reliable indicator warns of imminent correction

So far, 2024 has been a strong year for Bitcoin (BTC). While one of the earliest positive developments for the cryptocurrency – the approval of a series of U.S.’ first-ever spot BTC exchange-traded funds (ETFs) – led to a brief but significant crypto market downturn, the recovery in the second half of January and February has been nothing short of staggering.

Bitcoin particularly found itself at the center of attention after it entered into a major and ongoing surge on February 26 which, by February 29, saw it rise above $60,000 for the first time since 2021.

The momentum couldn’t be stopped even by a flash crash to $58,700 as the cryptocurrency exchange Coinbase (NASDAQ: COIN) buckled under pressure stemming from a surge of public interest in Bitcoin on February 28.

Ethereum (ETH) has also been offering a significant rise and is, at the time of publication, reaching for a key resistance area of $3,500, and meme coins have also been seeing noteworthy price action as Dogecoin (DOGE), for example, surged approximately 30% in the last 24 hours.

Still, such a rapid surge has some investors worried that a massive correction might be inbound, and one technical analysis (TA) tool in particular hints that such an event might be imminent for the flagship digital asset.

TD Sequential issues BTC sell signal

Early on Thursday, February 29, prominent crypto analyst Ali Martinez took to X to warn that TD Sequential – a technical analysis tool designed in 1994 by Tom DeMark and intended to identify possible trend reversals using the existing chart patterns – has flashed a strong sell signal on Bitcoin’s 4-hour chart.

Martinez also explained that so far, TD Sequential has been accurate in predicting BTC corrections and that each of the sell signals it has issued since February 15 has not only been accurate but also led to a correction ranging in magnitude from 1.50% to 4.20%.

While there is no clear indication of how major Bitcoin’s next likely correction could be, Martinez previously stated that the coin has a strong support level between approximately $54,000 and $56,000, with almost 1 million addresses buying BTC at those prices.

Bitcoin price chart

While Bitcoin might be in for a significant correction in the near future, its recent performance has been particularly strong, with the cryptocurrency surging as much as 21.92% in the last 7 days of trading from just above $51,000 to its press time price of $62,596.

BTC 7-day price chart. Source: Finbold

Additionally, the uptrend is seemingly ongoing as the latest 24 hours saw BTC rise another 3.41%.

Bitcoin has been showing significant strength in the long-term as well and is as much as 165.46% in the green in the last 52 weeks – with its performance from the start of Q3 2023 accounting for much of this rise – and is 42.01% up year-to-date (YTD).

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