Bitcoin News Today: Bitcoin Faces 11% Correction as Momentum Wanes

Matrixport, a prominent digital asset financial services platform, has released a report suggesting that Bitcoin's recent rally may face a short-term correction. The report highlights that while broader economic indicators continue to support risk assets, technical indicators show signs of waning momentum. Bitcoin's rapid ascent has pushed the Relative Strength Index (RSI) into overbought territory, indicating a potential retracement.

According to Matrixport’s analysts, the current price of Bitcoin, hovering near $120,000, could see a correction toward the $106,000–$108,000 range. This retracement is seen as a necessary "reset" before the next leg higher. The firm identifies $122,000 as a reasonable short-term target but emphasizes that the market needs to stabilize before attempting another breakout. They argue that such a correction would not disrupt the broader uptrend that began at $16,000 nearly 18 months ago.

Falling U.S. inflation and growing expectations for a Federal Reserve rate cut have provided positive tailwinds for cryptocurrencies. However, Matrixport warns that overly bullish sentiment could lead to increased volatility. A clearer signal from the Federal Reserve may come as early as the July 30 FOMC meeting, though September is considered a more likely pivot point.

Despite the short-term caution, Matrixport maintains that the long-term bullish structure for Bitcoin remains intact. Traders are advised to be mindful of potential double-top formations following steep rallies, which could indicate a temporary reversal in the market's upward trajectory. The firm's analysis underscores the importance of monitoring both technical indicators and broader economic signals to navigate the volatile cryptocurrency market effectively.