Bitcoin’s upward momentum has temporarily stalled, and a correction phase is expected before the next leg up. The coin is currently facing significant resistance at the $30K level, which hasn’t been tested yet.
The Daily Chart
After a pullback to the 61.8% Fibonacci retracement level at $19.6K, the price started a massive rally, reaching a new high of over $28K. However, the bulls failed to push past the major resistance zone of $30K.
This price region is also regarded as a psychological resistance level, as many traders believe that once the coin breaks past $30K, the bear market will officially end. Nonetheless, a clear discrepancy between the price and the RSI indicator has emerged, suggesting a short-term correction or consolidation phase could be on the horizon.
The 4-Hour Chart
The impulsive bullish rally is more apparent on the 4-hour timeframe. However, recent price action has shown a decrease in bullish momentum, indicating the possibility of a short-term consolidation or correction phase.
If this scenario plays out, Bitcoin may drop to two primary support levels: the significant support level of $25K and the price range between the 0.5 and 61.8 Fib retracement levels, roughly at $24.4K and $23K.
Nonetheless, there is also a divergence between the price and the RSI indicator in the 4-hour timeframe, increasing the probability of a short-term correction before the next significant move.
Bitcoin’s recent price surge has resulted in profit for many traders, leading to a shift towards a positive market sentiment.
The Net Unrealized Profit and Loss (NUPL) calculates the profit or loss of all coins as a ratio obtained by dividing the difference between the market cap and realized cap by the market cap.
If the most recent coin transfer resulted from a purchase, NUPL indicates the total profit or loss in all coins. Following months of negative values, the recent rally pushed NUPL into the yellow zone, indicating that more investors are now in profit. This shift can be interpreted as a bullish signal, as fewer traders feel compelled to sell their coins to prevent losses.