Impending Bitcoin Pullback: Are We Nearing a Local Top in BTC’s Value?

Key Points

• Bitcoin’s momentum indicators suggest a potential local peak, raising the possibility of a pullback.
• Bitcoin’s 4-hour RSI is in overbought territory, indicating strong bullish momentum but also potential for sharp price corrections.

Bitcoin’s recent performance indicates a potential local peak, with momentum indicators hinting at overextension. The question of whether another pullback is on the horizon is being raised.

On March 2nd, Bitcoin [BTC] saw a 9.44% surge in a single day, marking the highest one-day gain in three months. However, as the 4-hour RSI hit 70, the price action reversed, resulting in a 14.13% drop to $81,500 within 10 trading sessions.

Bitcoin’s Previous Performance and RSI Reading

Bitcoin last experienced a similar capital influx during the election run, when it reached its then-all-time high of $88,400 on March 11th, pushing the 4-hour RSI into overbought territory. Despite this, bulls managed to absorb sell-side liquidity, flushing out weak hands and pushing BTC to a $92,647 peak two days later.

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. An RSI above 70 typically indicates an asset may be overbought, suggesting a potential price pullback, while an RSI below 30 suggests it may be oversold, indicating potential for a price rebound.

Historically, when Bitcoin’s 4-hour RSI enters overbought territory, it signals strong bullish momentum but often precedes sharp price corrections.

Current Bitcoin Status and Potential Pullback

Three months later, Bitcoin has reclaimed the $88k mark for the first time in 17 days. However, on the 4-hour chart, the RSI has again surged near 80, raising the question of whether bulls can absorb the sell-side pressure, or if another March-style correction is imminent.

On March 12th, as Bitcoin’s RSI signaled overextension, Bitcoin ETFs registered their second-highest inflow – a record $1.114 billion. This suggests that sustained institutional demand played a significant role in absorbing the impact of 120,761 BTC, worth $10.67 billion, that flooded exchanges in a single-day sell-off.

As of now, Binance spot demand remains strong, with net outflows suggesting continued Bitcoin accumulation. The derivatives market also reflects bullish positioning.

Both long- and short-term SOPR (Spent Output Profit Ratio) have flipped above 0, confirming that holders are now in profit. However, with Bitcoin’s 4-hour RSI in overbought territory, profit-taking pressure could escalate, potentially triggering short-term volatility. Sustained buying momentum is crucial for Bitcoin to push toward $90k.

With “reciprocal” tariffs set to take effect on April 2nd, market uncertainty remains high. If resistance holds, a corrective move toward the $82k–$83k range appears likely in the near term.