Although bitcoin prices are reaching consecutive all-time highs, several indicators point to an oversold situation.

The cryptocurrency market shows strength as the price of Bitcoin (BTC) ticks down to $72,031 and reaches a new all-time high of $72,800 on March 11.

According to data from Cointelegraph Markets Pro and TradingView, on Monday, March 11, BTC reached a new high for the year at $72,850, up 5.7% from its starting price of $69,032.

Due to Bitcoin’s outstanding success, some worry that higher-level profit booking may cause a sell-off.

These three technical and market indications suggest that there may be a short-term correction in the price of bitcoin.

On the 12-hour timeframe, the TD sequential indicator flashes a sell signal

Independent analyst Ali saw that the bitcoin price was above $71,700, alerting short-term traders to the possibility of an impending reversal.

The following chart, shared by Ali, demonstrates that the 12-hour BTC chart has a sell signal from the TD sequential indicator.

Since the beginning of February, the price of Bitcoin has decreased by 1.6% to 3.5% each time this signal indicated selling. Short-term traders should keep a close eye on this trend!

Based on variations in intraday highs and lows, the TD sequential indicator is an oscillating trend-following chart overlay indicator intended to identify short-term trend reversals.

In this instance, the indicator suggests that Bitcoin’s price may decline from its current level by up to 3.5% and then trade at roughly $70,000.

The price of Bitcoin displays an “overheating signal.”

Since January 23, when the effect of spot Bitcoin ETFs‘ “sell-the-news” strategy subsided, the price of bitcoin has been trending exclusively upward. Since their launch on January 11, these new Bitcoin investment funds have received enormous financial inflows, and as of March 11, the total assets under management had reached $55.3 billion.

This has caused “overheated signals” to surface in the Bitcoin market. CryptoQuant analysts caution that although Bitcoin continues to reach new all-time highs, significant declines may occur shortly.

The blockchain analytics company published several pieces on the social network X on March 8, including numbers that suggested “potential overheating.”

The company disclosed an additional statistic that indicated miners were being underpaid despite realized profits hitting their highest point since December 2023.

“Miners are currently considered greatly overpaid, as profitability has reached its highest point since December 2023.”

According to CryptoQuant, traders’ unrealized profit margins had also hit 57%. Historically, this has been linked to impending corrections because traders eventually have to record profits.

“Moreover, holders of short-term investments have started selling at the highest profit margins since February 2021, which could indicate heightened selling pressure ahead,” continued CryptoQuant.

In the meantime, IntoTheBlock data indicates that 100% of Bitcoin investors are currently profitable, which may raise the likelihood of short-term profit-booking sell-offs.

The RSI for Bitcoin has been overbought throughout several periods

According to Coinglass’s heatmap, Bitcoin’s RSI shows overbought conditions in four of the five periods. Higher RSI readings are displayed at higher intervals. Currently, Bitcoin’s four-hour, weekly, daily, and hourly RSIs are 79.34, 88.34, and 70.74, respectively.

Data from TradingView corroborates this, showing BTC’s RSI at 89.2, 79, 72, and 70 on weekly, daily, 12-hour, and four-hour timeframes, respectively.

Overbought conditions generally describe recent movements in an asset’s price and reflect an expectation that the price trend may be corrected soon.

Additional data from Alternative, a platform that tracks “emotions and sentiments” surrounding Bitcoin, showed that the Crypto Fear and Greed Index at 82 – “extreme greed” conditions.

According to Alternative, the market is destined for a correction when investors become overly greedy. Recall that during the peak of the 2021 bull market, right before Bitcoin fell from its then-all-time high of roughly $69,000 and plunged towards $15,000 during the 2022 bear market, this index lasted over 80.

However, RSI circumstances do not ensure a trend reversal, even while these measurements alert market players to limit risks. Due to rising demand and the impending supply reduction, Bitcoin prices could continue to rise. However, cryptocurrency prices are very unpredictable.