Bitcoin’s retracement extended, driven by increased selling pressure, pushing the price towards a crucial and decisive support area that includes the critical 200-day moving average and the middle border of the ascending channel.
The price action within this significant range is extremely important in shaping Bitcoin’s future trajectory.
Technical Analysis
By Shayan
Bitcoin Price Analysis: The Daily Chart
Analyzing the daily chart, it becomes clear that Bitcoin’s recent correction has extended, leading to a significant decline. However, the retracement’s downward momentum was temporarily halted after reaching an important support range, marked by the middle boundary of the ascending channel and the crucial 200-day moving average at $39K, which provides robust support for buyers.
Given the strength of this support range and the potential presence of significant demand, it seems likely that the price will find support for now, leading to a phase of sideways consolidation. In this scenario, the recent downturn will serve as a necessary correction stage, laying the groundwork for a renewed bullish surge.
Nevertheless, an unforeseen break below the 200-day moving average could cause a cascading effect, again infusing fear into the market. However, Bitcoin’s price action within this pivotal zone remains crucial in predicting the cryptocurrency’s mid-term outlook.
The 4-hour chart
Examining the 4-hour chart reveals that the rejection of the $48K resistance zone has prompted the price to cross the lower boundary of the rising flag, indicating the prevailing bearish sentiment in the market. After a successful pullback to the broken level, the price started another significant bearish leg, suggesting a distribution behavior among market participants, especially smart money.
Despite these bearish signals, Bitcoin has reached a critical and significant support area, which includes the static support at $39K and is aligned with the significant 0.5 level of Fibonacci retracement, which acts as a formidable barrier against sellers’ downward efforts.
Consequently, the most likely short-term scenario involves a revival in buying pressure, supporting the price and initiating a bullish retracement. However, a sudden break below this crucial support would pave the way for the continuation of the recent decline towards the 61.8% level of the Fibonacci retracement at $35.1K.
On-chain Analysis
By Shayan
The Realized Cap, as measured by UTXO Age Bands, provides valuable insights into the distribution of realized capitalization based on the age of unspent transaction outputs (UTXOs). Each separate band indicates the portion of Realized Cap associated with UTXOs last used within a specific time frame. Essentially, upswings in these age groups indicate periods characterized by HODLing and accumulation within the Bitcoin market, while downswings indicate increased selling and distribution activity.
Currently, following a notable uptrend, Bitcoin has switched to a corrective phase due to the selling pressure arising from spot ETFs and the recent impulsive rise in its price.
Despite the ongoing correction, an analysis of the percentage of volume gained in a span of less than three months indicates that Bitcoin has not yet reached its annual peak. Consequently, it seems premature for the market-leading whales to complete their bullish trajectory. Nevertheless, after a 1-2 month adjustment period, there is a high probability that the price will experience a renewed rise, aiming to mark a new ATH.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% discount on Binance Futures first month (terms).
Disclaimer: Information found on CryptoPotato is that of authors cited. It does not represent the opinions of CryptoPotato on whether to buy, sell or hold any investments. You are advised to do your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
UnCirculars – Cutting through the noise, delivering unbiased crypto news
