Bitcoin’s ( BTC ) recent rally and new all-time high beyond $126,000 are starting to show signs of overheating on Thursday, October 9, as the daily technical picture flashes historically fairly reliable indicators of a coming correction. Namely, the Tom DeMark (TD) Sequential, which identifies potential reversals by counting consecutive price bars, rose to 9 on the cryptocurrency’s 24-hour chart. This parameter, as on-chain crypto analyst Ali Martinez notes , has been quite accurate this year, as the same value presaged a 7% pullback in July and a 13% drop in August. What’s more, Martinez’s analysis further suggests that the relative strength index ( RSI ) of 74.21 is likewise implying that “digital gold” is in the overbought zone. At the same time, the +100 reading on the Chande Momentum Oscillator (CMO), a market momentum measurement that oscillates between -100 and +100 and often peaks just before market reversals, adds further support to the argument. Bitcoin technical analysis. Source: Ali Martinez (@ali_charts) At the time of writing, Bitcoin is trading at roughly $121,750, down 0.59% on the day. If the RSI or CMO flatten or fall while the price remains the same or goes up, a bearish divergence would become likely. BTC 24-hour price. Source: Finbold A breakout still possible On October 7, another prominent strategist, TradingShot , also predicted Bitcoin was due for a short-term pullback due to a key technical rejection at the higher highs trendline near $126,000. This number, the reasoning went, has consistently capped price action since July 14 and acted as strong resistance throughout the crypto’s three-month consolidation, marking the top of several previous rallies. Much like Martinez, TradingShot pointed out that this recent price denial closely mirrors price behavior from mid-July and mid-August, both of which led to significant retracements. However, the analyst also added that a decisive breakout above the $126,000 resistance would invalidate this bearish setup and signal the start of a new upward trend. Featured image via Shutterstock The post Is a Bitcoin crash coming? These signs say yes appeared first on Finbold .
