Bitcoin continues its effort to break above the $24K resistance level, despite being constantly rejected by it in recent weeks. Will the bulls eventually manage to break it, or will the bears get the upper hand?
Technical Analysis
By: Edris
The Daily Chart
The price is technically in an uptrend as it has been forming higher highs and lows, but the $24K level is proving to be a very strong obstacle. The 100-day moving average has reached the same zone as well. It has been providing additional resistance, and so the price is yet to close above it.
A breakout above the $24K level could cause a massive rally towards the $30K supply zone. This would become the next major resistance. On the other hand, the 50-day moving average – currently sitting at the $22K level – could support the price if a bearish pullback occurs.
The 4-Hour Chart
On the 4-hour timeframe, everything remains the same as last week. The price is yet to break above the large bearish flag and has been rejected once again following a fourth touch of the higher boundary of the pattern. Currently, the cryptocurrency seems to be targeting the bullish trendline demonstrated on the chart.
The RSI indicator has been signaling a massive bearish divergence between the recent 4-hour highs. A bearish breakout below the mentioned trendline would be the most anticipated scenario. In this case, a retest of the lower boundary of the flag and the $20K support area would be in the cards.
If the price eventually breaks the flag to the downside, a bearish continuation would be expected. As a result, BTC could drop below the recent $18K low and continue towards the $15K level.
On-chain Analysis
By: Edris
Bitcoin Long Term Holder SOPR
Bitcoin’s bear market in previous months has led to massive realized losses by all participants. Even the long-term holders, who usually spend their coins in profit, are currently realizing losses. This behavior often occurs during the last phase of a bear market, a period in which long-term holders begin to panic sell. This is known as “capitulation.”
These holders typically have large amounts of Bitcoin, as they accumulated their coins at cheaper prices and have held them for long periods. They would inject a significant supply into the market, which would usually trigger the last crash of the bear cycle. And eventually, when smart money decides to accumulate these cheap coins, the bottom starts to form.
The long-term holders’ SOPR metric demonstrates the number of profits or losses which are realized by this particular group. This metric has been trending below 1 since late May 2022, indicating that the long-term holders are realizing losses constantly. However, it seems to be recovering and starting an uptrend lately.
Historically, this metric crossing above 1 has signaled the beginning of a new bull market. In spite of that, it is still too early to announce the end of the bear market – this recent rally could just be another bull trap in the middle of the downtrend – as seen in the previous bear market. The long-term holders’ SOPR metric should be monitored closely in the short term to determine which case would be more likely.
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Cryptocurrency charts by TradingView.
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