What Bitcoin correction? BTC price holds $55K despite several bearish indicators
Bitcoin price refuses to pull back despite Bollinger Bands and Fear and Greed pointing to an overheated rally.
Experienced analysts and media outlets including Cointelegraph recently highlighted some indicators suggesting that the Bitcoin (BTC) price rally could be overextended.
Those bearish views include one from Bollinger bands creator John Bollinger, suggesting traders use a trailing stop, as signs of a “top” were building up.
However, it is worth noting that Bollinger Bands and the Fear and Greed indicator are backward-looking metrics. Therefore, those will usually flash overbought levels whenever there’s a 30% weekly rally, such as the most recent one.
As crypto analyst TechDev_52 correctly questioned, there’s no way to know whether we’re entering a large potential correction or a rally continuation.
For example, popular YouTuber and trader Nebraskangooner shows that the recent $56,000 top could have been the upper range of a bullish channel that has guided Bitcoin since late July.
Greed” mode can last for weeks or months
Going back to the Fear and Greed indicator, below are some examples that such a metric can sustain overbought levels for longer than three or four weeks. Notice how between Jan. 29 to Feb. 26, the Bitcoin Fear and Greed indicator remained above 65, indicating that traders were overconfident.