Bitcoin Breaks $30K Resistance Level, Correction Expected
Bitcoin’s price has recently surpassed the crucial $30K resistance level after bouncing back from the $25K support zone. However, a correction is likely in the near future.
Daily Chart Analysis
Looking at the daily chart, Bitcoin’s price has broken through the $30K resistance level and surged towards $35K. Currently, the price is consolidating at this level, indicating a potential correction in the coming weeks. The Relative Strength Index (RSI) is also in overbought territory and shows a bearish divergence between the last two price highs, further increasing the chances of a rejection from the $35K zone.
4-Hour Chart Analysis
Examining the 4-hour timeframe reveals more clarity. The market has formed an ascending channel around $35K, suggesting a potential bearish reversal if the price breaks below it. On the other hand, a bullish breakout above this pattern could lead to a stronger rally towards the $37K resistance level. The RSI in this timeframe hovers around 50%, indicating equilibrium in momentum. Ultimately, the direction of the breakout from the channel will determine the outcome.
On-Chain Analysis: Bitcoin Active Addresses
The recent price surge of Bitcoin has caught the attention of many market participants. To gain insight into whether this is a new bullish phase or a bull trap, analyzing on-chain data is crucial. One important metric is the number of active addresses on the Bitcoin network.
The chart shows the 30-day exponential moving average of Bitcoin’s active addresses, representing unique addresses that successfully transacted BTC as senders or receivers. Since the beginning of 2023, there has been a gradual increase in active addresses, which has played a significant role in the bullish price action witnessed over the past 9 months. If this metric continues to rise, it suggests that the recent bullish move may be sustained. Conversely, a decline in network activity could be an early indicator of a potential bearish reversal.
Hot Take: Bitcoin’s Price Surge Faces Potential Correction
Bitcoin’s price has broken through the $30K resistance level and surged towards $35K. However, there are indications of a potential correction in the short term. The daily chart shows consolidation at the $35K level and a bearish divergence on the RSI. On the 4-hour chart, an ascending channel formation suggests a possible bearish reversal if the price breaks below $35K. The direction of this breakout will determine future momentum. Additionally, on-chain analysis reveals an increase in active addresses, contributing to the recent bullish trend. A continued rise in active addresses would support further upward movement, while a decrease may signal a bearish reversal.
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