Bitcoin Technical Analysis
Bitcoin has been experiencing a struggle between buyers and sellers around the $35K resistance level, resulting in a consolidation phase with some volatility. However, a breakout above this level could lead to a significant uptrend.
Daily Chart Analysis
Bitcoin has been following an upward trend since the beginning of the year, moving in an ascending channel pattern. The recent approach to the $35K resistance shows strong buying pressure, hinting at a potential bullish market. However, there is also bearish divergence between the RSI indicator and the price, indicating a decrease in bullish momentum. If buyers can secure this level, it may pave the way for a positive mid-term trend.
But considering the bearish divergence, a correction phase with minor retracements is possible. In this case, the middle boundary of the ascending channel would be the initial support for buyers.
4-Hour Chart Analysis
On the 4-hour chart, Bitcoin has surpassed its previous significant daily swing high and aimed to overcome the $35K resistance but faced rejection. The emergence of a bearish divergence between the price and the RSI indicator indicates a possible short-term retracement. Key support levels would be at $31,200 and $31,800 if sellers surpass buyers.
On-chain Analysis
The NVT (Network Value to Transaction) golden cross metric is currently at 2.245, suggesting overvaluation of BTC’s market capitalization. However, historical trends show that during recovery phases, BTC prices often rise alongside increasing market capitalization, leading to further price boosts and a transition to a bull market.
It’s important to focus on accumulation signals when the indicator dips below -1.6, indicating oversold conditions which have presented excellent buying opportunities during recovery and bull markets historically.
Hot Take: Bitcoin’s Potential Bull Market Transition
Despite indications of overvaluation in BTC’s market capitalization based on the NVT golden cross metric, historical trends suggest that this could lead to further price boosts and a transition to a bull market. It may be more reasonable to consider the potential shift to a bull market in the future rather than worrying about overheating signals from this indicator.
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