As a seasoned crypto investor with several years of experience, I’ve seen my fair share of market ups and downs. Bitcoin’s current consolidation phase is not new to me, but the prolonged duration of it has left many investors anxious. The technical analysis presented by TradingRage provides some insight into the possible direction of the market.
Bitcoin‘s price hasn’t broken out of its current price range and hasn’t given any indication of continuing to rise in the last few weeks.
Technical Analysis
By TradingRage
The Daily Chart
For the past two months on the daily chart, I’ve observed the price oscillating within a large descending channel. This pattern has kept the price from making significant progress in either direction. However, after a recent false breakout from the lower boundary, the market seems to be regaining momentum and is showing signs of continuing its upward trend.
As a crypto investor, I’ve noticed that the Relative Strength Index (RSI) has been trending upward and is now hovering just above the 50% mark. This indicates that the momentum in the market is starting to shift bullishly. However, it’s important to keep in mind that the midline of the descending channel serves as a significant resistance level at this point. In other words, even though the RSI suggests a potential bullish trend, the market may still face some hurdles before we see another rally.
The 4-Hour Chart
Based on the 4-hour chart’s analysis, the price has frequently challenged the $60,000 mark as a support during the past few weeks.
It’s intriguing to note that the price action appears to be forming an inverted head and shoulders pattern. The key support level for this pattern lies at $63,500. Should this level give way, there is a strong likelihood of a quick surge toward the resistance at $68,000, with potential for further gains in the near term.
On-Chain Analysis
By TradingRage
Bitcoin Short-Term Holder SOPR
The value of Bitcoin has struggled to maintain its robust advancement of late and has instead experienced a steady decline over the past two months. Numerous factors could explain this downturn, but among the most plausible is investors cashing in their profits.
As a crypto investor, I’ve come across various metrics to understand market trends better. One such metric is the Short-Term Holder SOPR or the Short-Term Holder Realized Profit Ratio. This chart illustrates this ratio, which reveals the average profit or loss realized by short-term investors when they sell their cryptocurrencies. Values above one suggest that these investors are currently in profit, while values below one indicate that they’ve suffered losses.
Based on the graph’s representation, the Short-Term Holder Spent Output Profit Ratio (STH SOPR) has been swiftly decreasing during the latest correction, moving away from all-time peaks. This signifies that short-term investors have already cashed in substantial profits. With the current STH SOPR hovering around parity, it’s reasonable to assume that most inexperienced traders have left the market. If there is an opportunity for a new uptrend to commence, it might be presently available.
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2024-05-15 14:56