Bitcoin’s ( BTC ) price has slowly bled over the past 24 hours, and there is an increasing possibility that the asset may have peaked at $68,500.

Let’s examine the factors that explain why Bitcoin’s recent high might be a local top.

Bitcoin spot CVD remains negative

During the Q1 rally, Bitcoin reached a new all-time high and BTC’s aggregated spot volume cumulative delta (CVD) was one metric that was consistently on the rise during that period. This indicator highlights the buying pressure by retail investors on exchanges like Binance, Coinbase, OKX, and Bybit.

At present, the aggregated spot volume CVD has been on a decline during this bullish period, which means retail continues to sell at higher price ranges.

Bitcoin rally to $68.4K may have been the Uptober top — Here’s why image 0

Bitcoin spot CVD aggregated open interest and price chart. Source: Trading View

XBTManager, an onchain analyst, shed light on the continued spot sales and mentioned that Bitcoin is currently at a resistance where it must move into a “decision phase.”

The analyst added that for upward momentum to continue, demand needs to increase on exchanges. However, there are more signs of weakening at the moment, which means prices can be pushed back into a demand zone, around the $63,000-$64,000 level.

The Bitcoin-USDT futures market is overleveraged

According to CryptoQuant CEO Ki Young Ju, the current BTC estimated futures leverage ratio with respect to the USDT pair across all the exchanges has reached an all-time high.

Bitcoin rally to $68.4K may have been the Uptober top — Here’s why image 1

Bitcoin estimated futures leverage ratio. Source: CryptoQuant

This means that not just Bitcoin futures or perpetual futures, but the entire crypto derivatives market is currently overleveraged, including USDT pairs with Ethereum (ETH) and Tron (TRX).

It is important to note that prolonged periods of overleveraged futures are common in bullish environments, and Axel Adler Jr, a crypto researcher, believes in the possibility of a volatility shakeout, which can happen in either direction. Adler Jr said,

“Currently, leverage volume on the top three exchanges stands at 32%. A rise above 55% could trigger a cascade of liquidations.”

Related: 4th time's the charm? Bitcoin tags $68K in attempt to break 217-day downtrend

Bitcoin indicators show third bearish divergence

Previously, Cointelegraph reported that Bitcoin’s six-and-a-half-month downtrend broke to form a series of higher lows. Each higher low has been a failed attempt to break above the resistance trendline, and on the 12-hour chart there is precedent for another correction.

As observed in the chart, each time Bitcoin has formed a higher low and tested the descending trendline, it has exhibited a bearish divergence with both the relative strength index (RSI) and moving average convergence divergence (MACD) line.

Bitcoin rally to $68.4K may have been the Uptober top — Here’s why image 2

Bitcoin 12-hour chart. Source: Trading View

These bearish divergences have historically been followed by a 25% and 30% price drop. A 25% drop from the current price would be a retest of the $52,000-$50,000 range.

A key invalidation would be formed if RSI, MACD, or both indicators form a new high with respect to their previous top, which would be bullish for BTC.

Related: Why are Bitcoin traders worried about a 'painful' BTC price dip?

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.