Bitcoin’s Bullish Momentum in Question
Bitcoin has experienced a significant bullish trend recently, breaking through multiple resistance levels. However, the recent closure of daily candles raises questions about whether this momentum can continue.
Technical Analysis
By TradingRage
Daily Chart Analysis
Looking at the daily chart, Bitcoin has surpassed the $37,500 and $40K resistance levels since November. However, the market seems to be slowing down as bearish behavior has been observed this week. The $40K level is currently being tested, and if it breaks down, the price could drop to $37,500 or even the 200-day moving average at around $31K. The Relative Strength Index also indicates a bearish signal by dropping below the overbought region. Despite this, Bitcoin’s price has started to recover in the past few hours.
4-Hour Chart Analysis
On the 4-hour timeframe, Bitcoin is undergoing a correction after weeks of bullish momentum. It has formed a double-top pattern just below $45K and retraced back to the $40K zone. However, there are signs that Bitcoin may rebound from this level and potentially rise towards $45K. Conversely, a breakdown of the $40K support level could result in a plunge to $38K or lower in the coming weeks.
On-Chain Analysis
By TradingRage
Bitcoin Miner Reserve (EMA 7)
After hitting a bottom around $17K, Bitcoin’s price has surged in recent months. To gain insight into whether a new all-time high is likely, analyzing miners’ behavior is crucial. The chart shows the 7-day exponential moving average of the miner reserve metric, which measures the amount of BTC held in miners’ wallets. A decrease in this metric suggests miners are offloading their Bitcoin due to short-term price expectations and potential overvaluation of Bitcoin.
Hot Take: Uncertainty Surrounds Bitcoin’s Bullish Momentum
While Bitcoin has shown significant bullish momentum, recent market behavior raises concerns about its sustainability. The daily and 4-hour charts indicate potential price drops and a slowdown in momentum. Additionally, on-chain analysis reveals miners’ pessimism as they offload Bitcoin. It remains to be seen whether Bitcoin can maintain its bullish trend or if a correction is imminent. As an investor, it is crucial to monitor these technical and on-chain indicators to make informed decisions.
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