The price of Bitcoin was recently repelled from a significant resistance area and is now showing signs of a bearish trend reversal. However, there are still several support levels available that can push the cryptocurrency higher again.
Technical analysis
By TradingRage
Bitcoin Price Analysis: The Daily Chart
On the daily time frame, the price has formed a major upward channel below the $48,000 level. After a rejection of the $48,000 resistance zone last week, the market started to decline rapidly. The channel has been broken to the downside and the price is approaching the $40,000 support zone.
If this level is not sustained, $38,000 and the 200-day moving average, which is around $34,000, will be the potential targets in the coming weeks.
Source: TradingView
The 4 hour chart
Looking at the 4-hour time frame, it is evident that the price is currently showing a bearish trend by forming lower highs and lower lows. With the momentum, the channel was also broken downwards.
The Relative Strength Index also shows values below 50%, indicating that the momentum is in favor of the sellers. Therefore, a break of the $40,000 support level seems likely.
Source: TradingView
On-chain analysis
By TradingRage
Miner's reserve
When it comes to the Bitcoin network, there are no more influential participants than miners. In addition to providing security and processing transactions, miners also hold large amounts of BTC in their wallets. Therefore, analyzing their behavior could give us clues in that direction.
This chart shows the Miner Reserve metric, which measures the amount of BTC miners hold. Increasing values indicate accumulation behavior, while decreasing values indicate sales by miners.
As can be seen from the chart, miners have been selling their holdings continuously since the uptrend began. While this is a natural profit realization behavior, the subsequent selling pressure can result in a bearish reversal if enough demand is not met.
Source: CryptoQuant
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Cryptocurrency charts from TradingView.
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