Bitcoin Shows Overheated Signals as Market Faces Potential Correction

Bitcoin has sharply corrected after losing the $115K support level, causing market uncertainty. Analysts debate its short-term direction, with some predicting further declines due to profit-taking and cautious sentiment, while others view the correction as a necessary pause for potential recovery.

Bitcoin metrics indicate an "overheated" state, suggesting a prolonged consolidation phase is possible.
The critical trading range is identified between $112K and $115K, crucial for bulls and bears.
Market factors, including the Federal Reserve's policies and institutional demand, will influence Bitcoin’s next move.

Bitcoin Stock-to-Flow Model Signals Overvaluation

Analyst Darkfost highlights that when the Bitcoin Stock-to-Flow (S2F) value exceeds 3, it indicates overvaluation and a high probability of correction. Current trends approach this threshold, advising investors to consider locking in profits.

Past S2F readings have preceded significant price drops, such as declines from $63,500 to $30,800 and $67,000 to $15,800.
Darkfost emphasizes the importance of pullbacks for sustainable market growth.

BTC Struggles To Reclaim The $115K Level

Currently, Bitcoin trades around $115,019, having bounced from the $112K support zone. It faces resistance at $115,724, a key previous support level.

The 50-day and 100-day SMAs above the current price add resistance.
The 200-day SMA at $110,677 provides solid support.
Low volume during the bounce suggests weak buying conviction.
A decisive break above $115,724 could lead to testing the $122,077 all-time high.