As an analyst with a background in studying Bitcoin’s price movements and on-chain data, I find the recent developments in the market intriguing. The uptick in demand near the crucial support level of $59.2K, which is also the 200-day moving average, has led to a slight rebound above this significant resistance level.
Recently, Bitcoin has experienced a surge in interest around a significant underlying floor, causing a minor bounce back and pushing the price above the 200-day moving average, which currently hovers at approximately $59,200.
The current price trend indicates a possible bullish turnaround if the price holds steady above its 200-day moving average.
Technical Analysis
By Shayan
The Daily Chart
As a crypto investor, I’ve taken a closer look at Bitcoin’s daily price chart, and my analysis reveals some noteworthy insights. For quite some time, we’ve been in a bearish trend, with Bitcoin trading below crucial resistance levels. However, things took a turn for the worse when Bitcoin dipped below the 200-day moving average at $59,200. This event sparked a wave of fear and uncertainty among investors, as this key technical level often acts as a significant support for the market. The downward pressure could potentially lead to further price declines if not addressed promptly.
The MA at this level is essential for Bitcoin’s price, and when it gets breached, it often forebodes a downward trend. However, Bitcoin experienced significant buying interest around the substantial support area of the 0.5 Fibonacci mark ($56K), which triggered a minor bullish recovery. The price has since risen above its 200-day moving average, suggesting a possible false signal or bear trap.
An upward divergence between Bitcoin’s price and the RSI (Relative Strength Index) indicator is another sign of an impending bullish reversal in the short term. If Bitcoin manages to hold above its 200-day moving average, this would strengthen the case for a mid-term bullish recovery, with the potential price target being the 100-day moving average at $64,600.
The 4-Hour Chart
Bitcoin encountered resistance on the 4-hour chart around the $71K mark, which represented a significant multi-month high. Subsequently, it started a prolonged downtrend, as indicated by progressively lower peaks and troughs.
At the $56K mark where significant resistance lies, the bearish trend started to lose steam, leading to a period of sideways movement. After this pause, there was a noticeable uptick in purchasing power, causing a mild recovery in price.
Bitcoin currently finds itself at a pivotal point, facing both the psychologically significant resistance level of $60,000 and the defining trendline from its recent multiple-week decline. Here, increased selling activity could potentially materialize.
Should the cryptocurrency regain this resistance zone, the bullish momentum might persist and potentially reach the $65,000 milestone. On the other hand, if the resistance level rejects it, we can expect the bearish trend to resume, aiming for the significant $56,000 support.
On-chain Analysis
By Shayan
Examining on-chain information revealing miners’ profitability has emerged as a useful indicator for predicting market lows during bearish phases and signaling the end of corrective periods within bull markets. By interpreting this data, we can glean valuable insights into Bitcoin’s price tendencies and broader market trends.
As a historical analyst, I’ve observed that miners’ profitability taking a hit during bull markets has frequently paved the way for considerable price surges in Bitcoin. For instance, notable occurrences of this pattern can be traced back to:
- 2016: During this bull cycle, miners’ profitability decreased sharply, as highlighted by the red-circled area. Following this decline, Bitcoin experienced a strong upward trend.
- 2020: A similar pattern was observed, where a rapid decline in miners’ profitability was followed by the beginning of a robust bull market for Bitcoin.
Starting from 2024, miner profits have shown a striking resemblance to previous patterns. A noticeable decrease in this indicator has occurred, echoing trends seen during the 2016 and 2020 bull runs. This observation implies that while it’s unclear when the current correction will conclude, the shift towards another bull market might be imminent.
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2024-07-14 17:11