The Bitcoin price has been struggling to break above a significant resistance level and is currently experiencing a retracement, following the recent red days on Wall Street. Is it just a short-term correction or the start of a new bearish leg?
Technical analysis
By: Edris
the daily chart
On the daily time frame, the price fell shortly after being rejected from the critical $25K level. The 50-day moving average around the $22K level would be the first likely support level, followed by the 200-day moving average around the $20K psychological support area.
If these dynamic support levels do not hold, a further drop towards the $18K level would be imminent. However, if the price bounces off any of these levels, another retest and potential break above the $25K resistance zone would be very likely.
The RSI indicator, which has signaled the recent rejection with a clear bearish divergence, is trending around the 50% threshold, indicating balance of momentum on the daily time frame.
The 4 hour chart
Looking at the 4-hour chart, the price has declined after multiple rejections from the $25,000 area and is heading towards the $22,500 support level. A breakdown of this level would potentially lead to a deeper drop towards the $20K level and even $18K in the coming weeks.
On the other hand, the RSI is approaching the oversold zone this time frame, which could result in a temporary bounce from the $22,500 level, which could lead to a break above the $25,000 level.
A break above the $25K level would be followed by more bullish price action over the next few weeks, and the bear market could finally be considered over from a technical standpoint.
chain analysis
Bitcoin Mining Reserve
Bitcoin price has risen lately and market sentiment is turning more positive. However, miners, a key cohort in the bitcoin market, have yet to show any bullish behavior.
The graph below shows the miner reserve metric, which measures the amount of BTC in miners’ wallets. This metric has been declining in recent months. Some miners are finally capitulating and others are selling their BTC to provide liquidity and cover operating costs.
If this trend continues, selling pressure could overwhelm the market with oversupply and cause another price decline.
Binance Free $100 (Exclusive) – Use this link to sign up to receive $100 free and 10% off your first month’s fees for Binance Futures (terms).
PrimeXBT Special Offer – Use this link to sign up and enter the code POTATO50 to receive up to $7,000 on your deposits.
Disclaimer: The information found on CryptoPotato is that of the writers cited. It does not represent the views of CryptoPotato on whether to buy, sell or hold investments. You are advised to do your own research before making any investment decisions. Use the information provided at your own risk. Consult the Legal Notice for more information.
cryptocurrency charts by TradingView.
