Bitcoin price sell-off continues, but data highlights need for healthy correction

Bitcoin price is down 5% over the last 24 hours to trade at $41,645 on Dec. 11. Despite the sharp price correction, technical indicators and on-chain data show that Bitcoin (

Can Bitcoin sustain the uptrend?

The ongoing correction could, however, be a bear trap, as it may be considered a healthy correction in an otherwise extensive bullish trend established over the past few months.

Moreover, data from crypto market intelligence firm Santiment showed that Bitcoin’s exchange outflows were increasing. According to the chart below, the BTC exchange flow balance now stands at -347.

The negative reading shows BTC outflows eclipsing inflows, suggesting that investors are more inclined to hold than sell, which is a bullish sign.

This suggests that the latest dip toward $40,000 could be a short-term correction giving traders an opportunity to buy more on the dip before continuing the upward trend.

From a technical standpoint, Bitcoin traded above all the major moving averages, which maintained their upward trajectory. Notably, these chart overlay indicators presented areas of strong support on the downside.

The moving average convergence divergence indicator (MACD) was still moving above the neutral line in the positive region. The MACD line (blue) was still positioned above the signal line (orange) after crossing above it on Oct. 16, suggesting that the market conditions still favored the upside.

Therefore, BTC’s price will likely continue to rise from the current levels, with buyers targeting a break above $44,000. Note that a clear breakout above this level could see Bitcoin rise to tag the $50,000 psychological level going into the New Year when the United States Securities and Exchange Commission is expected to make a decision on spot Bitcoin exchange-traded fund applications or in the spring of 2024 when the next Bitcoin halving event takes place.