Bitcoin’s bullish stance on the daily timeframe remains intact, as the price has undergone a correction and has found support at the crucial 50-day moving average level. Despite these positive aspects, the price is now facing significant resistance at $30K.
Technical Analysis
By Shayan
The Daily Chart
Bitcoin climbed for several months before reaching the critical resistance level of $30K, where it failed to stay above. However, it found support at the 50-day moving average of $27.3K during a brief correction phase, which ultimately led to another uptrend. This is a positive signal for the cryptocurrency’s overall outlook, indicating that the bulls are still in control. However, BTC is currently facing significant and decisive resistance at the $30K price zone and is attempting to break out of it. If successful, it could cause a strong bullish rally towards the $40K price channel. However, if it fails to surpass this vital level, a double-top pattern could emerge, leading to another bearish leg.
The 4-Hour Chart
On the 4-hour timeframe, Bitcoin has formed an ascending channel and recently dropped to its lower threshold. However, the trendline and the short-term static support level of $27K protected the price, causing it to surge. Currently, the cryptocurrency is facing a critical resistance level on the channel’s middle trendline, which will determine its next move. If the price manages to surpass this level, it will aim for the $30K price region. On the other hand, if the trendline rejects the price, there is a possibility of a decline toward the lower boundary and the $27K support level.
On-chain Analysis
Spending coins that have remained inactive for over 155 days often suggests longer-term trends in Bitcoin, as was recently the case. By analyzing the Long-Term Holder Spent Output Profit Ratio (SOPR) using monthly averages, we can identify extreme spending points that align with the bottom of bear markets. In all past instances where the SOPR had comparably negative values, the price never dropped below that point. As a result, this indicator suggests that the Bitcoin price is unlikely to fall lower than the value established in November-December 2021.
It’s important to remember that this indicator primarily reflects long-term cycles, which usually take years to reach extremes, and it doesn’t capture short-term fluctuations. Therefore, while long-term investors can benefit from strategic investments, traders should consider other indicators during transitional phases.
