Bitcoin’s recent downward correction has paused near a significant support area, indicated by the 200-day moving average. While there has been a slight rebound, it lacks momentum and suggests a potential phase of sideways consolidation.
The Daily Chart
A closer look at the daily chart reveals that Bitcoin’s correction has temporarily halted near a crucial support range. This range is defined by the middle boundary of the ascending channel and the 200-day moving average at $39K. The strength of this support range is expected to act as a fortress for buyers in the mid-term, preventing further downward attempts. The most likely scenario for Bitcoin in the mid-term is a period of sideways consolidation between the 200-day moving average and the resistance at $48K.
The 4-Hour Chart
Analyzing the 4-hour chart shows that the rejection from the $48K resistance zone has been temporarily halted. The price has found support in a critical region, which includes the static support of $39K and aligns with the 0.5 level of Fibonacci retracement. This creates a strong barrier against downward attempts by sellers. As a result, the price has reversed and surged towards a substantial resistance zone, which includes the lower boundary of the ascending flag and a critical static resistance region between $43,578 and $45,606.
On-chain Analysis
Bitcoin’s recent rejection from the $48K resistance level has triggered a downward trend and raised concerns among investors. One important metric to consider is the Short-Term Holder Spent Output Ratio (STH SOPR), which assesses whether short-term holders are selling their coins at a profit or loss. The STH SOPR metric has fallen below 1 recently, indicating that short-term holders are selling below their purchase cost out of fear and to minimize losses. While capitulation during an uptrend can be positive, it’s crucial to monitor whether this trend continues as sustained selling pressure may lead to excess supply and further downward pressure on the market.
Hot Take: Bitcoin’s Sideways Consolidation with Key Support and Resistance Levels
Bitcoin’s recent correction has encountered a pause near significant support levels, including the 200-day moving average. While there has been a slight rebound, the lack of momentum suggests a potential phase of sideways consolidation. The daily and 4-hour charts indicate key support and resistance levels that are likely to shape Bitcoin’s mid-term price action. On-chain analysis highlights the behavior of short-term holders, who are currently selling at a loss. This trend needs to be monitored to assess its impact on market dynamics. Overall, Bitcoin is expected to consolidate within a range until there is a significant breakout or breakdown.
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