After encountering a significant rejection at the $48K resistance level, Bitcoin has recently discovered support near the crucial 100-day moving average, prompting a slight retracement. However, if a pullback materializes, the most likely scenario would involve a renewed bearish leg, targeting significant support at $38K.
Technical Analysis
By Shayan
The Daily Chart
Upon analyzing the daily chart, it becomes apparent that following Bitcoin’s recent setback from the pivotal $48K level, the price sought support around a crucial range defined by the middle boundary of the ascending channel and the significant 100-day moving average at $39K.
Consequently, a slight correction ensued, retracing the price toward the existing fair value gap (FVG) bounded within the $43,578 and $45,606 thresholds.
This price range carries the potential to exert resistance against further selling pressure, maybe even propelling it back toward the substantial 100-day moving average. However, a breach below this critical moving average could lay the groundwork for a mid-term bearish trend.
The 4-Hour Chart
An examination of the 4-hour chart reveals a notable dip below the lower boundary of the ascending flag, leading the price to the static support zone encompassing $39K and the significant 0.5 level of Fibonacci retracement, resulting in a noteworthy reversal.
Consequently, the price experienced a bullish surge, retracing towards a critical resistance marked by the lower boundary of the ascending flag.
However, Bitcoin appears to be in the process of completing a pullback to the broken flag, setting the stage for a renewed bearish phase. Therefore, in the event of a successful pullback, the market should anticipate a mid-term descent towards the $38K significant support region.
On-chain Analysis
By Shayan
Looking at the behavior of Bitcoin miners becomes particularly crucial, especially in the aftermath of the recent surge in price beyond the significant $40K threshold. Given their pivotal role in the Bitcoin network, the actions of miners can wield substantial influence over the market.
The Miners’ Position Index Metric (MPI) displayed in the chart offers a representation of the ratio of total miner outflow (in USD) to its one-year moving average. A higher MPI value implies that miners are sending more coins than usual, indicating potential selling activity.
The chart notably illustrates a significant uptick in MPI during Bitcoin’s recent upward movement above $40K. However, based on the MPI analysis, concerns regarding capitulation appear to be minimal. It appears that miners have already secured considerable profits, fortifying their financial positions.
This resilience suggests that miners have the capacity to endure potential deeper corrections in the BTC market in the future.
Nevertheless, a word of caution is warranted; if the ongoing selling behavior among miners persists, it could lead to an oversupply of Bitcoin in the market, possibly resulting in a substantial price crash.
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Cryptocurrency charts by TradingView.