Bitcoin’s Market Shifting and Potential Correction Phase
Bitcoin’s recent market movement indicates a strong presence of buyers, suggesting a potential bullish trend. However, due to the rapid surge in price and approaching a significant resistance level, a temporary correction phase is likely.
Daily Chart Analysis
Examining the daily chart, Bitcoin has been on an uptrend since the beginning of 2023, following an ascending channel pattern with higher highs and lows. This pattern reflects the influence of buyers, pushing the price close to a crucial resistance level of around $35K. The RSI indicator also supports this trend, approaching overbought territory and indicating increased buying pressure.
If buyers can break through this important level, it may lead to a positive mid-term trend with higher resistance targets. However, given the rapid price spike, a consolidation correction phase with minor retracements is probable.
4-Hour Chart Analysis
On the 4-hour chart, Bitcoin has surpassed its previous significant daily swing high and maintained strong upward momentum. The price reached a new high around $35K but faces substantial resistance at this level due to abundant supply. This resistance has caused a corrective phase, with key support levels at $30.9K and $31.8K.
If demand overcomes the available supply, there is potential for an imminent breakout and significant price surge. Regardless of the outcome, closely monitoring price movements in the coming days is crucial due to potential market volatility.
On-chain Analysis: Short-Term Holder SOPR Metric
Bitcoin’s recent movements suggest a bullish market trend supported by reliable indicators. However, caution is necessary considering the potential for correction due to Bitcoin’s rapid value escalation.
The Short-Term Holder SOPR metric, which measures the profitability ratio of short-term spent outputs, has spiked as Bitcoin approaches the critical resistance zone at $35K. This spike indicates selling pressure from short-term investors taking advantage of the price surge to realize profits or cut losses. Breaking above the $35K level could eliminate uncertainty and stimulate significant market demand.
Hot Take: Bitcoin’s Potential Correction Phase and Market Volatility
Bitcoin’s recent market activity suggests a strong presence of buyers and potential for a bullish trend. However, given the rapid price surge and approaching resistance level, a temporary correction phase is likely. Close monitoring of price movements is crucial due to potential market volatility.
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