Bitcoin Consolidates Below $28K Level, Testing Key Area
Bitcoin’s price has been consolidating below the $28K level in recent days, unable to continue its upward momentum towards the $30K resistance level. The current price action is testing a crucial area that should be closely monitored.
Technical Analysis by Edris
The Daily Chart
On the daily chart, BTC has been trading between the 50-day and 200-day moving averages. The 50-day moving average is around $27K, while the 200-day moving average is near the $28K level.
Currently, the price is retesting the $27,500 support level. A breakdown below this level could lead to further downside towards the 50-day moving average in the short term. However, if there’s a bullish rebound and a break above the 200-day moving average, it may open up the path for another attempt at breaking the critical $30K resistance zone.
The 4-Hour Chart
Looking at the 4-hour timeframe, there are signs that the $27,500 support level is on the verge of breaking down. The RSI indicator also suggests that sellers have gained momentum in this timeframe.
If a bearish breakout occurs, the first likely target would be around $26K, followed by the $25K zone as a potential last resort for buyers. These signals indicate a potentially bearish outlook for BTC in the near term.
Onchain Analysis by Shayan
There has been an interesting shift in sentiment among US investors and traders as indicated by the Bitcoin Coinbase premium index. This metric measures the percentage difference between Coinbase Pro price and Binance price and reflects buying or selling pressure among US investors.
During Bitcoin’s recent surge, the premium index had been trending upward, indicating increased buying activity from American investors. However, the rapid decline in this metric suggests that US investors played a significant role in the recent market downturn. If the trend continues and the metric drops below 0, it could signal further declines in the market in the coming weeks.
This shift in sentiment among US investors is an important indicator to monitor as it can provide valuable insights into the future direction of the market.
Hot Take: BTC Consolidation Continues, Onchain Analysis Highlights Shift in Sentiment
The current consolidation of Bitcoin’s price below the $28K level raises caution for traders and investors. Technical analysis suggests potential downside if key support levels are broken, while onchain analysis reveals a notable shift in sentiment among US investors.
Monitoring these indicators closely will be crucial in determining whether Bitcoin will break out of its consolidation phase and continue its upward trajectory or face further declines in the near term.
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