Bitcoin’s Recent Price Surge
Bitcoin has experienced a significant price increase recently, rising nearly 10% since the start of the month. However, it’s important to consider the possibility of a consolidation or pullback in the near future.
Technical Analysis: The Daily Chart
On the daily chart, Bitcoin has been showing strong upward momentum, breaking through multiple resistance levels. After surpassing $38K, the price quickly rose above $40K. Currently, Bitcoin is holding above the $40K level, and a successful close above this level could lead to further gains towards $48K. However, it’s likely that the price will consolidate before continuing its upward movement due to an overbought signal from the relative strength index.
Technical Analysis: The 4-Hour Chart
Examining the 4-hour timeframe provides more insight into the recent rally. Bitcoin has broken out of a large rising wedge pattern, ending a period of consolidation. However, there is a high probability of a pullback in the short term as indicated by an overbought relative strength index and decreasing bullish momentum in recent candles. A drop back below $40K is likely.
On-Chain Analysis
Bitcoin Binary CDD (SMA 30)
An analysis of market behavior using the Binary Coin Days Destroyed (CDD) metric with a 30-day moving average reveals interesting trends among significant players. Binary CDD measures whether long-term holders’ movements are higher or lower than average, with ‘1’ indicating higher movements and ‘0’ indicating lower movements.
The current shakeout in the metric coincides with Bitcoin surpassing $40K. This suggests that long-term holders are relatively inactive and not eager to sell at the current price. It indicates confidence in the ongoing rally and potential for continued upward momentum as long as there is no unexpected surge in the metric.
Hot Take: Bitcoin’s Price Surge and Potential Consolidation
Bitcoin has recently experienced a significant price surge, but it’s important to consider the possibility of a consolidation or pullback in the near future. Technical analysis of the daily chart suggests that Bitcoin could continue its upward movement if it successfully closes above $40K, but a consolidation is likely due to overbought conditions. The 4-hour chart further supports the possibility of a pullback, with an overbought relative strength index and decreasing bullish momentum. On-chain analysis shows that long-term holders are relatively inactive, indicating confidence in the rally and potential for continued upward momentum. However, monitoring the Binary CDD metric is crucial to assess selling pressure from long-term holders.
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