Bitcoin (BTC) may experience further corrections as it approaches a “top-heavy” zone, according to a well-known on-chain analyst.

Checkmate, a popular pseudonymous crypto trader, informed his 94,500 followers on the social media platform X that top-heavy zones occur when “too many people buy too many coins at too high of a price.”

“In these scenarios, a critical question is ‘Ok, they are underwater, but by how much? How bad is it?’ Being underwater by -1% is very different to -20%,” Checkmate explained. “On an unrealized profit basis, Bitcoin short-term holders are at a crucial decision point. We would expect a bounce here… but also a phase shift.”

Checkmate also urged traders to monitor potential trigger points that could indicate a shift in sentiment.

“While we are not ‘Top Heavy’ yet, we are on the verge of entering it. I still believe that consolidation remains the most likely scenario, and markets often have to decline before they can rise again,” Checkmate said. “After 18 months of continuous upward price action, a period of several months of consolidation and correction is not only anticipated but necessary. Don’t panic, but managing near-term expectations is essential. Keep things in perspective. Stay humble and stack sats.”

At the time of writing, BTC is trading at $60,541 and has dropped nearly 5% in the last 24 hours.

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