Bitcoin Price Analysis: A Potential Bearish Leg on the Horizon
After bouncing off the 100-day moving average, Bitcoin’s price began retracing towards the resistance range of $43,578-$45,606. However, the momentum has weakened, indicating the possibility of a new bearish leg.
Technical Analysis
By Shayan
The Daily Chart
Upon examining the daily chart, Bitcoin experienced a bullish retracement after rebounding from a crucial support region near the 100-day moving average and $40K level. The aim was to reclaim the yearly high at $48K. However, the bullish momentum faltered upon reaching a pivotal resistance region between $43,578 and $45,606. This consolidation phase could act as a barrier against further buying pressure and potentially lead to a reversal towards the 100-day moving average. Breaching this critical range could set the stage for another attempt to overcome the significant $48K resistance.
The 4-Hour Chart
An analysis of the 4-hour chart reveals that Bitcoin’s price extended its bearish movement towards the static support zone of $39K and the 0.5 Fibonacci retracement level. Despite a bullish reversal, recent price action and low volatility suggest a potential renewed bearish move in the coming days. Traders should consider managing risk by preparing for a mid-term descent towards the significant support region at $38K or an unexpected surge above the lower boundary of the ascending flag.
On-chain Analysis
By Shayan
In recent weeks, significant players in the market have displayed stillness. Examining their behavior is crucial in understanding prevailing trends. The Binary Coin Days Destroyed (CDD) metric chart, featuring a 30-day moving average, provides insights into long-term holders’ actions. An uptrend in Binary CDD coincides with a surge in Bitcoin’s price, suggesting increased activity among smart money. This could indicate an opportune moment for long-term holders to distribute their assets and adjust their exposure to the market. As a result, the market may be on the verge of a short-term correction towards the $38K region. Monitoring this metric will help gauge potential shifts in market dynamics.
Hot Take: Bitcoin Faces Resistance and Potential Bearish Leg
Bitcoin’s price is currently facing resistance at the $43,578-$45,606 range after a bullish retracement from crucial support levels. The momentum has weakened, indicating the potential for a new bearish leg. Technical analysis shows that breaching this resistance could pave the way for another attempt at overcoming the significant $48K resistance. On-chain analysis suggests increased activity among long-term holders, potentially leading to a short-term correction towards the $38K region. Traders should closely monitor these key levels and market dynamics to make informed decisions about their positions.
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