The price of Bitcoin has been very bullish in recent months. However, today it is finally showing subtle signs of correction.
Therefore, it is worth analyzing the charts for possible support levels.
Technical analysis
By TradingRage
Bitcoin Price Analysis: The Daily Chart
On the daily chart, the price has gradually broken through the resistance levels. Still, today's action was very pessimistic as the daily candle looks very pessimistic. The price fell by around 10% today before recovering from the $40,000 support level.
If this level holds, a recovery could occur and the market could rally towards the next significant resistance level, which is at the $48,000 mark. On the other hand, a bearish breakout could lead to a decline to the $38,000 area and possibly the $31,000 area.
Source: TradingView
BTC price on the 4-hour chart
The 4-hour chart shows today's decline much more clearly. The price has formed a double top pattern around the $44,500 level and continued to plunge towards the $40,000 zone. Furthermore, the Relative Strength Index is trending down below the 50% line but has not yet reached the oversold region.
As a result, a further decline could be expected in the short term and the fate of the market over the next few months would be determined by the price reaction to the $40,000 support level.
Source: TradingView
On-chain analysis
By Shayan
Bitcoin NUPL
Analyzing the overall sentiment of market participants is crucial to understanding trends. The behavior of key players, especially during the distribution and accumulation phases, often signals the beginning or end of up and down cycles.
The chart presented illustrates the Net Unrealized Profit/Loss (NUPL) metric, which represents the overall profit/loss ratio of all coins. Due to a significant increase in Bitcoin price, the indicator has risen sharply and is in the orange zone. Historically, when the NUPL metric enters the orange zone, it indicates a robust uptrend that is typically followed by new, solid upside rallies. Therefore, it can be assumed that the market will maintain its upward momentum in the long term.
The NUPL metric in the Orange region is a positive signal for market participants and suggests favorable conditions for sustained uptrends. However, it is important to remain vigilant and monitor market dynamics for possible sentiment swings that could impact future trends.
Source: CryptoQuant
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Cryptocurrency charts from TradingView.
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