Bitcoin Faces Rejection at $48K Resistance
After attempting to breach the critical resistance at $48K, Bitcoin encountered substantial selling pressure, resulting in a notable rejection and a drop to the $41K level. However, the cryptocurrency currently seems likely to undergo a brief consolidation before embarking on its next significant move.
Daily Chart Analysis
Examining the daily chart, Bitcoin’s attempt to reclaim the significant resistance at $48K faced rejection, leading to a substantial 15% decline to the crucial support at $41K. This resistance is delineated by the upper boundary of the ascending channel and the pivotal $48K threshold, acting as a robust barrier for BTC buyers. Should the selling pressure persist and extend the retracement, a vital support zone is expected to intervene, preventing further downward movements.
4-Hour Chart Analysis
The 4-hour chart illustrates price consolidation within an ascending flag pattern, indicating a balance between sellers and buyers. Bitcoin’s recent bullish movement aiming to breach the decisive $48K resistance, aligned with the upper boundary of the ascending flag, faced increased selling pressure, triggering a cascading price drop. At present, BTC has reached the lower boundary of the flag around the $42K support zone.
On-chain Analysis: Puell Multiple Metric
The Puell Multiple metric provides a comprehensive view of the market by assessing the profitability of mining pools compared to the past year. It poses the question: “How profitable are mining pools if all newly created Bitcoins were instantly distributed on the market?”. Historical data indicates that when the metric enters the green zone (discount region), it often signals the market’s bottom and the conclusion of bear markets.
As per the chart, miners’ revenue experienced a significant uptick from August 2023 until the year’s end, reaching the middle region of the Puell Multiple, with a 14-day Simple Moving Average (SMA) included. The last time this region was reached was in January 2021, when Bitcoin reached $40K for the first time. Consequently, based solely on the Puell Multiple metric, the potential return compared to risk remains favorable, as the indicator is below the intermediate region.
Hot Take: Bitcoin Consolidation Before Next Move
Bitcoin has faced rejection at the $48K resistance level and dropped to $41K. The cryptocurrency is likely to undergo a consolidation phase before its next significant move. The daily chart shows strong resistance at $48K, while the 4-hour chart indicates a balance between sellers and buyers within an ascending flag pattern. On-chain analysis using the Puell Multiple metric suggests that mining pools are profitable, indicating a positive market condition. However, it’s important to consider that significant capital has been in profit since 2022, which could trigger a price correction before the next bullish trend. Overall, Bitcoin is expected to consolidate before making its next move.
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