Bitcoin’s Price Volatility and Resistance Zone
Bitcoin’s price is currently experiencing increased volatility due to the SEC-ETF controversy and a false SEC tweet announcing ETF approval. Despite this, the price is facing a significant resistance zone. If this resistance is broken, it could potentially lead to a strong upward trend with the aim of reaching new all-time highs in 2024.
Technical Analysis
By Shayan
The Daily Chart
An analysis of the daily chart shows that Bitcoin has been in an uptrend since January 2023, forming higher highs and higher lows within an ascending price channel. This indicates a healthy bull market with buyer dominance.
However, recent volatility was caused by a false SEC tweet about ETF approval. This led to price fluctuations and brought Bitcoin close to a significant resistance area. This resistance region includes the upper trendline of the ascending channel and coincides with the $48K resistance level.
If there is a successful breakthrough in this critical area, it could trigger a strong uptrend and potentially lead to a new all-time high for Bitcoin. The formal announcement of ETF approval would further boost the price.
The 4-Hour Chart
A closer look at the 4-hour chart reveals that Bitcoin’s price is consolidating in an ascending pattern, approaching the crucial $48K resistance region. This suggests a balance between buyers and sellers. Within this consolidation, an ascending flag pattern is forming, with the upper threshold aligning with the key resistance level at $48K.
Currently, the price is attempting to break above the upper boundary of the flag, leading to increased volatility as buyers and sellers compete. A successful breakout could pave the way for a notable bullish movement. However, given the current market conditions and sentiment, Bitcoin’s next direction may remain uncertain until the SEC ruling on Bitcoin spot ETFs.
On-chain Analysis
By Shayan
The Realized Cap, measured through UTXO Age Bands, provides insights into the distribution of realized capitalization based on the age of unspent transaction outputs (UTXOs). Each colored band represents the proportion of Realized Cap held by UTXOs last moved within a specified time frame.
Realized Cap is determined by valuing each UTXO at the price it had when it last moved, offering a snapshot of capital held by both long-term and short-term holders. Increases in these age bands indicate periods of HODLing and accumulation among Bitcoin holders, while decreases suggest selling and distribution activities.
Long-term holders (holding BTC for over 155 days) contribute to almost 90% of the realized cap, with UTXOs older than six months falling into this category. In previous sell-offs during cycles, when this indicator surpassed 70%, Bitcoin’s price experienced declines. Conversely, when these values decreased for each group, significant price surges followed. A similar trend is currently unfolding, indicating a potentially healthy bullish market from a long-term perspective.
Hot Take: Bitcoin’s Volatility and Potential for Upward Movement
Bitcoin’s price is currently facing increased volatility due to the SEC-ETF controversy and false information circulating about ETF approval. However, there is a significant resistance zone that, if broken, could lead to a strong upward trend and new all-time highs in 2024. Technical analysis of both the daily and 4-hour charts suggests that there is potential for a breakout and bullish movement. Additionally, on-chain analysis indicates that long-term holders are contributing to the majority of the realized cap, suggesting a healthy bullish market from a long-term perspective. Overall, while there are uncertainties in the market, Bitcoin’s potential for upward movement remains promising.
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