Bitcoin Breaks Key Resistance Levels, Eyes $30K
After gradually moving up and surpassing the 100-day and 200-day moving averages, Bitcoin has broken above these crucial indicators. This has brought hope and a bullish sentiment to the market.
Currently, Bitcoin is targeting the significant resistance level of $30K.
Technical Analysis
By Shayan
The Daily Chart
Examining the daily chart, Bitcoin found strong support around $25K and started an upward trend. This led to a breakthrough above the critical resistance levels of the 100-day and 200-day moving averages.
The surge in momentum created increased demand and pushed Bitcoin towards the important resistance region of $30K, which is also its yearly high.
However, this price range acts as a psychological barrier where sellers may temporarily pause the upward movement. It’s crucial to observe Bitcoin’s behavior around this level in the coming days.
The 4-Hour Chart
Looking at the 4-hour chart, there is a clear pattern of higher highs and higher lows. After a strong upward movement, the price broke its descending trendline and completed a pullback, indicating a continuation of the uptrend with stronger momentum.
However, Bitcoin is approaching a significant resistance zone at $30K, which has a substantial supply of Bitcoin available for sale. If buyers manage to overcome sellers, there could be a sudden breakout that might lead to the liquidation of many short positions. On the other hand, if sellers dominate, the market may face rejection and enter into a consolidation phase.
Regardless of the outcome, closely monitoring price action in the coming days is essential.
On-chain Analysis
By Shayan
Despite the recent uptrend in Bitcoin, where sellers failed to break the $25K support level, there is an interesting development in the futures market indicating a potential consolidation correction phase.
The funding rates metric, which represents traders’ sentiments in the perpetual futures market, is significant in this context. Positive funding rates indicate a dominance of long-position traders, while negative rates suggest a dominance of short-position traders.
Initially, during the price spike, the funding rates stayed positive, indicating a bullish sentiment. However, as the price surged impulsively, the metric turned negative, signaling the entry of sellers into the market. This shift suggests a possible consolidation correction phase. However, if Bitcoin bulls manage to push the price higher, there is a chance of a short squeeze event occurring and causing an unexpected spike in prices.
Hot Take: Bitcoin Breaks Resistance Levels and Aims for $30K
Bitcoin has successfully broken above key resistance levels and is now targeting $30K. The daily chart shows strong support at $25K and a breakthrough above the 100-day and 200-day moving averages. On the 4-hour chart, there is a pattern of higher highs and higher lows, indicating an uptrend with enhanced momentum. However, $30K poses a significant resistance zone where sellers may pause the upward movement. Monitoring Bitcoin’s behavior around this level is crucial. On-chain analysis reveals an interesting development in the futures market with funding rates turning negative, suggesting a potential consolidation correction phase. Nonetheless, if buyers overpower sellers, there could be a sudden breakout and liquidation of short positions.
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