Bitcoin Price Correction Continues as Bulls Strive to Push Above $44,000

Bitcoin Over-Extended: On-Chain Data Shows Signs of Exhaustion Among Bulls

The price of Bitcoin (BTC) has dropped by 5% in the past 24 hours, currently trading at $41,645 on Dec. 11. Despite the sell-off, technical indicators and on-chain data suggest that Bitcoin still exhibits strength as bulls aim to push the price back above $44,000.

On-chain data reveals that Bitcoin price has become "over-extended" after a recent rally above the $40,000 psychological level. Analysts suggest that the flagship cryptocurrency's price was overheating, leading to the need for a correction. Metrics such as the Bull-Bear Market Cycle Indicator and the miner profit/loss sustainability indicate that buying pressure could diminish as traders book profits.

Bitcoin Faces Resistance at $44,000: A Tough Hurdle for Bulls

The ongoing correction in the Bitcoin market is attributed to strong resistance at the $44,000 supply zone. Lookintobitcoin's golden ratio multiplier indicator shows that the 1.6 multiplier target has been reached in this area. The barrier at $44,000 poses a tough hurdle for bulls, as on-chain data indicates aggressive selling from sellers who bought Bitcoin between the $43,346 and $44,627 price range.

Is the Correction a Bear Trap?

While the correction may seem concerning, it could be considered a healthy correction within a larger bullish trend. Data from Santiment suggests that Bitcoin's exchange outflows are increasing, indicating that investors are more inclined to hold than sell, a bullish sign. This suggests that the current dip towards $40,000 could present a buying opportunity for traders before the price continues its upward trend.

Technical Analysis Supports Further Price Increase

From a technical standpoint, Bitcoin price remains above major moving averages, indicating strong support on the downside. The moving average convergence divergence indicator (MACD) suggests that market conditions still favor the upside, with the potential for BTC's price to rise above $44,000. A clear breakout above this level could propel Bitcoin towards the $50,000 psychological level in the near future.

With the upcoming decision on spot Bitcoin exchange-traded fund applications and the next Bitcoin-halving event in 2024, Bitcoin's price is expected to continue its upward trajectory.