Bitcoin faces heightened risk of a substantial price correction if it fails to hold the crucial $100,000 support level. Market indicators point towards potential overvaluation and increasing downward pressure.
The Network Value to Transactions (NVT) ratio, a key valuation metric comparing market cap to transaction volume, has surged to its highest level this year. This historically signals potential overvaluation and often precedes price corrections.
Technically, Bitcoin is forming a double-top pattern, a bearish chart formation. A confirmed breach below the $100,000 support level would validate this pattern and could trigger a drop towards $92,000. Such a decline is estimated to cause over $1.17 billion in long position liquidations.
Conversely, a decisive rebound above the $102,734 resistance level could signal a bullish reversal. This scenario would negate the bearish pattern and potentially propel prices towards the $105,000 mark.
Given the volatile and uncertain near-term outlook, investors are strongly advised to monitor key support and resistance levels closely, alongside critical market metrics like the NVT ratio.