The market struggled to push above the important $25K resistance, and the price is now slowly declining. So the chances of correction before the next bull run have increased.
technical analysis
By sleeping
the daily chart
The $24K-$25K area is currently providing the most significant resistance for bitcoin on the daily time frame. It is also an important psychological level, as it has been the main roadblock during the last eight months.
However, due to the recent bullish phase of the market, the price recovered and reached the $24K area. Nevertheless, 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 chances of a short-term correction.
Nevertheless, the cryptocurrency could retest the 200-day EMA and broken the trendline before starting another rally with a target of $25K.
4 hour chart
On the 4-hour time frame, the price declined below the lower boundary of the flag and re-tested the trendline to complete the pullback, indicating confirmation of the described pattern. However, the positive momentum was weaker than expected, causing volatility in BTC.
Meanwhile, a stable support has formed near the $22.3K level. As a result, multiple sell-stop orders placed below this support level provide enough liquidity to capture the market before initiating the next move.
Therefore, this clears up a short-term consolidation correction scenario for now, unless the bulls surprise the market and print a huge green candle on the BTC chart.
on-chain analysis
By sleeping
Poole provides participants with multiple metrics comprehensive insight into the phase of the market, asking, “How profitable would mining pools be compared to last year if all bitcoin created were distributed to the market immediately?”
Historically, every time the metric falls into the green zone, the market has finally found a bottom and marked the final phase of the bear phase. Accordingly, the metric had fallen into the green zone due to the massive fall in Bitcoin in the past months. However, the recent increase in the price of bitcoin has resulted in an increase and exit of the green zone.
This can be interpreted as a bullish signal, indicating that the bear market is over, and that bitcoin may have found its bottom. Still, an opposite scenario is always on the table, and the recent price increase could be another significant bull trap. Therefore, it is better to be careful.
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Cryptocurrency charts by TradingView.
source: cryptopotato.com
