The market has struggled to break above the significant resistance level at $25K, and now the price is slowly declining. Therefore, the possibility of a correction before the next rally has increased.
Technical analysis
By Shayan
the daily chart
The $24K-$25K region currently provides the most significant resistance for Bitcoin on the daily time frame. It is also a vital psychological level, since it has been the main barrier for the last eight months.
However, due to the recent bullish leg of the market, the price increased and reached the region of $24K. However, the bulls failed to push the price above it and it was rejected. Furthermore, a prolonged bearish divergence between the price and the RSI indicator increases the probability of a short-term correction.
However, the cryptocurrency could retest the 200-day moving average and the broken trend line before kicking off another rally, targeting $25K.
The 4 hour chart
On the 4-hour time frame, the price broke below the lower bound of the flag and retested the trend line to complete the pullback, indicating a validation of the described pattern. However, the positive momentum was weaker than expected, causing BTC to fluctuate.
Meanwhile, a static support level has formed at the $22.3K level. As a result, many sell stop orders below this support level provide adequate liquidity for the market to take before initiating the next move.
Therefore, this approves the short-term consolidation correction scenario for now, unless the bulls surprise the market and print a large green candlestick on the BTC charts.
chain analysis
By Shayan
Puell Multiple’s metrics give participants a broader view of the market stage by asking, “How profitable are mining pools compared to last year if all Bitcoins created were instantly distributed to the market?”
Historically, every time the metric dipped into the green zone, the market eventually bottomed out, marking the final phase of the bear leg. Consequently, the metric had fallen into the green zone due to Bitcoin’s massive downtrend in recent months. However, the recent uptrend in the price of Bitcoin has caused a surge and exit from the green zone.
This could be interpreted as a bullish sign, indicating that the bear market is over and Bitcoin may have bottomed out. However, there is always a reverse scenario on the table, and the recent price surge could be another major bull trap. Therefore, it is better to be vigilant.
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cryptocurrency charts by TradingView.
