Bitcoin Faces 10–15% Correction Risk After Rejection Near $89K

Bitcoin Risks Pullback as Key Resistance Halts Rally Near $89K

Bitcoin’s upward momentum has stalled after hitting a new April high of $88,874, with analysts warning that the asset may be poised for a short-term correction. Market indicators and key technical resistance levels suggest a potential price dip of up to 15% could be on the horizon.

BTC/USD 1-hour chart. Source: TradingView

Data shows BTC/USD retracing after reaching local highs earlier this week, failing to maintain its position above a crucial resistance zone marked by the 200-day simple moving average (SMA).

Technical Resistance in Play

“Interesting spot. Broke above the daily 200EMA and diagonal resistance. So far, saw a sharp rejection from the daily 200MA,” trader Daan Crypto Trades shared on X, highlighting the technical battle taking place on the charts.

The 200-day SMA is historically a strong support line during bull markets. However, Bitcoin lost this level in March amid intensified selling pressure tied to macroeconomic uncertainty and renewed U.S. trade tensions. Since then, BTC touched lows under $75,000 before rebounding sharply.

BTC/USD 1-day chart. Source: Daan Crypto Trades/X

Stochastic RSI Signals "Overbought" Conditions

Despite recent bullish momentum, some traders believe a correction is now more likely. Analyst Roman cited the stochastic relative strength index (RSI) reaching overbought levels, noting that in past instances, such conditions have preceded significant pullbacks.

“The last four times the stochastic RSI was this overbought, we saw a 10–15% correction,” Roman explained. “Given the downward momentum on the S&P 500, a similar move now would make perfect sense.”

As of April 22, the daily stochastic RSI remained near the top of its range, reinforcing concerns that Bitcoin may be due for a breather.

BTC/USD 1-day chart with 200 SMA, stoch RSI data. Source: TradingView

Bullish Outlook Still in Play for Some

While short-term caution dominates among some traders, others are maintaining a bullish macro view. Analyst Cas Abbe argues that Bitcoin has likely bottomed around the $74K–$75K zone, supported by whale accumulation and renewed demand reflected in the Coinbase premium—a key metric showing increased U.S. investor interest.

“In the past few weeks, I’ve been analyzing various on-chain data and macroeconomic trends, which make me believe that a BTC reversal has already started,” Abbe noted in a post on X.

He pointed to broader global conditions—such as a weaker U.S. dollar, record highs in global M2 money supply, and delayed bullish momentum from gold’s breakout—as signals that Bitcoin may soon resume its upward trajectory.

“I don’t see this as a bull trap,” Abbe added. “Most altcoins have also bottomed out. We could see a sustained rally if this trend continues.”

BTC/USD vs. XAU/USD chart. Source: Cas Abbe/X

Conclusion

With Bitcoin testing major resistance near $89,000 and technical indicators showing overbought signals, a short-term correction between 10% and 15% is a real possibility. However, long-term bullish sentiment remains intact for many traders, supported by macroeconomic tailwinds and strong on-chain fundamentals. The coming days may prove crucial in determining whether Bitcoin consolidates, pulls back—or breaks out further into new territory.