Bitcoin’s price has been experiencing a downward trend for several weeks, resulting in lower highs and lows. However, there is still hope that the potential for a bullish rally has not exhausted yet.
Technical Analysis
By: Edris
The Daily Chart
As per the daily chart, the price has been declining lately after failing to break through the crucial $30K resistance level. Additionally, the 50-day moving average lying around $28K has been broken and could act as resistance until the price trades below it.
The $25K support level seems the most likely target in the short term, as it is a strong supportive level for the bulls. If $25K gets broken down, the 200-day moving average located around the $23K level could also be tested.
It’s essential to note while the price continues to be above the 200-day moving average, it is technically considered a bull market.
The 4-Hour Chart
By analyzing the 4-hour chart, the price has been gradually declining and creating a massive bullish flag below the $30K level. These patterns, commonly known as bullish continuation patterns, imply a bullish market if the price breaks them upward.
Bitcoin is currently facing resistance at $27,500. However, as the same level rejected recently, there is a possibility that the lower boundary of the pattern could be tested again in the upcoming weeks.
A bearish breakout from this channel and the $25K support level could be catastrophic for BTC holders, as the market could plummet towards the $20K mark in a short amount of time.
Onchain Analysis
By Shayan
By studying the spending patterns of inactive coins that have been dormant for over 155 days, we can predict Bitcoin’s long-term prospects. Examining the Long-Term Holder Spent Output Profit Ratio (SOPR) through monthly averages, we can identify extreme spending positions that coincide with the initial phases of a bullish market.
The accompanying chart clearly shows that the metric surpassed a value of one, indicating that long-term holders are realizing profits. Such events typically occur during the early stages of Bitcoin’s bull runs.
It’s worth emphasizing that this indicator mainly reflects long-term cycles that generally take months or even years before reaching extremes and does not capture short-term fluctuations.
