Bitcoin’s Price Analysis: Potential Bearish Reversal and Support Levels
Bitcoin’s price has faced rejection from a significant resistance area, indicating a potential bearish reversal. However, there are still support levels that could push the cryptocurrency back higher.
Technical Analysis
Bitcoin Price Analysis: The Daily Chart
On the daily timeframe, Bitcoin has been forming an ascending channel below the $48K level. After being rejected from the $48K resistance zone, the market has started falling rapidly. The channel has been broken to the downside, and the price is approaching the $40K support zone.
If the $40K support level fails to hold, potential targets in the coming weeks could be $38K and the 200-day moving average at around $34K.
The 4-Hour Chart
Analyzing the 4-hour timeframe, it is evident that Bitcoin is currently demonstrating a bearish trend with lower highs and lows. The channel has also been broken to the downside with momentum.
The relative strength index (RSI) is showing values below 50%, indicating momentum in favor of sellers. This suggests a probable breakdown of the $40K support level.
On-Chain Analysis
Miner Reserve
Miners play a crucial role in Bitcoin’s network as they provide security, process transactions, and hold significant amounts of BTC in their wallets. Analyzing their behavior can provide insights into market direction.
The miner reserve metric measures the amount of BTC that miners hold. Rising values indicate accumulation behavior, while declines show selling by miners.
According to the chart, miners have been consistently selling their holdings since the beginning of the uptrend. While this is a natural profit realization behavior, it can lead to a bearish reversal if not met with sufficient demand.
Hot Take: Potential Bearish Reversal Requires Caution
Bitcoin’s recent rejection from a significant resistance area and its bearish characteristics raise caution for crypto traders. The support levels at $40K, $38K, and the 200-day moving average around $34K will be crucial to watch.
Additionally, on-chain analysis highlights the consistent selling behavior of miners, which could add further selling pressure to the market. Traders should monitor these factors closely to gauge the potential for a bearish reversal.
Remember to conduct thorough technical analysis and consider multiple indicators before making any trading decisions. Stay informed and adapt your strategy accordingly to navigate the current market conditions.
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