- Bitcoin is showing signs of a local top as the RSI nears overbought territory, increasing the likelihood of a short-term pullback.
- Bitcoin needs sustained buying momentum to push past $90K, but profit-taking pressure could trigger a correction toward $82K–$83K.
Bitcoin (BTC) is flashing warning signs of a potential local top, as key momentum indicators suggest overextension. With the Relative Strength Index (RSI) nearing overbought territory, could another correction be imminent?
BTC’s Rally and the Overbought Signal
On March 2, Bitcoin surged by an impressive 9.44%—its highest single-day gain in three months. However, history shows that such aggressive price movements often precede sharp pullbacks. Following this rally, BTC’s price reversed, shedding 14.13% over ten trading sessions to hit $81,500.
A similar trend occurred during Bitcoin’s previous run to an all-time high of $88,400 in early March. The 4-hour RSI pushed into overbought territory, yet bulls managed to absorb selling pressure, propelling BTC to a peak of $92,647 within two days. Now, BTC has reclaimed $88,000 for the first time in 17 days, but the RSI is again hovering near 80—historically a red flag for a potential correction.
Institutional Demand vs. Profit-Taking Pressure
Despite the RSI signal, institutional demand remains a key factor in Bitcoin’s price resilience. On March 12, when Bitcoin was in a similar overbought condition, BTC exchange-traded funds (ETFs) recorded an inflow of $1.114 billion—the second-highest on record. This institutional appetite helped absorb the impact of a massive sell-off worth $10.67 billion in BTC.
At present, Binance spot market demand remains strong, and Bitcoin accumulation continues, as indicated by net outflows. The derivatives market also reflects bullish positioning, with both long- and short-term holders sitting in profit, as seen in the Spent Output Profit Ratio (SOPR) metric.
Will BTC Hold or Correct?
While Bitcoin’s bullish momentum remains intact, the current RSI reading suggests that profit-taking pressure could intensify, triggering short-term volatility. To sustain an upward trajectory toward $90,000, Bitcoin needs continued buying momentum.
However, with upcoming economic uncertainties, such as reciprocal tariffs set to take effect on April 2, market sentiment could shift. If Bitcoin fails to break through resistance, a corrective move toward the $82,000–$83,000 range appears likely in the near term.
For now, traders should keep a close eye on BTC’s RSI and institutional inflows. Will Bitcoin defy the odds and push higher, or is a March-style correction looming? The next few days could be crucial in determining the market’s direction.
