BTC Price Analysis: 2 Critical Levels to Watch for Bitcoin in the Short Term
Bitcoin’s price is consolidating in a tight range as market participants are uncertain about the future direction of the price.
Technical Analysis
By TradingRage
The Daily Chart
On the daily chart, the price has recently rebounded from the $50K area, following the significant drop below the 200-day moving average. Currently, the market is consolidating below the moving average, which is located around the $63K mark, failing to climb back above.
Meanwhile, the $56K support level currently holds the market, preventing the price from dropping further. Therefore, a breakout from either this level or the 200-day moving average could determine the short-term price action of BTC and the crypto market.
The 4-Hour Chart
Looking at the 4-hour timeframe, the price has created a bullish flag pattern following the recent recovery from the $50K area.
Considering the price action inside the flag pattern, it could only be a matter of time before the market breaks it to the upside, which could result in a rally toward the $64K resistance zone in the short term.
On the other hand, note that things could get ugly quickly if the flag gets broken to the downside.
On-Chain Analysis
By TradingRage
Bitcoin Short-Term Holders SOPR
While Bitcoin’s price action has been quite choppy over the last few months, analyzing what the investors are going through can be insightful.
This chart presents the Bitcoin short-term holder SOPR, which measures the aggregate ratio of profits (or losses) realized by short-term investors. Values above one show aggregate profit realization, and values below one indicate losses being realized on aggregate.
As the chart suggests, during the last few months of consolidation, the profit margins for short-term holders have been declining, and they have even been realizing losses in the previous few weeks. While unfortunate, this shakeout could be a typical sign of a price bottom in the middle of a long-term bull run. Yet, this is not guaranteed, as a wide range of factors can affect how the price will behave in the near future.
The post BTC Price Analysis: 2 Critical Levels to Watch for Bitcoin in the Short Term appeared first on CryptoPotato.
