Bitcoin has recently seen a recovery in its price after a month of bearish price action. The market is currently showing upward momentum, raising the possibility of hitting a new all-time high soon. On the daily chart, Bitcoin found support at the $56K level and reclaimed the 200-day moving average around $60K. Despite these positive indicators, the market is facing resistance at the $65K level, with multiple failed attempts to break through in the last three days. However, with a bullish momentum shown by the RSI, there is a strong possibility of Bitcoin trading above $70K again, although this scenario could be jeopardized if the price drops below $60K.
Short-Term Price Action Analysis
When analyzing Bitcoin’s price action in the short term, it is crucial to consider the buying and selling behavior of short-term holders. The Bitcoin Short-Term Holder SOPR metric plays a significant role in predicting price movements in the near future. This metric determines whether holders who have held their coins for less than six months are realizing profits or losses. Values above 1 indicate selling at a profit, while values below 1 indicate loss realization. Currently, the 30-day exponential moving average of the STH SOPR is below 1, indicating that short-term holders are selling at a loss. This is often a signal for correction bottoms in a long-term bull market. If the metric rises above 1, it is likely that the price will see a significant rally and potentially reach a new all-time high in the upcoming weeks.
Impulsive Rally and Potential Corrections
Looking at the 4-hour timeframe, Bitcoin has initiated an impulsive rally after breaking the bearish trendline to the upside. However, the market has struggled to surpass the $65K level, and a correction cannot be ruled out. The Relative Strength Index shows a bearish divergence and an overbought signal, suggesting a potential decline towards the $60K level. Despite these short-term challenges, the overall market structure remains bullish, indicating that there is still potential for further price gains in the near future.
While Bitcoin’s price action has shown signs of recovery and upward momentum, there are still obstacles to overcome, such as resistance levels and potential corrections. By closely monitoring key metrics like the Short-Term Holder SOPR and technical indicators like the RSI, investors and traders can better predict and prepare for future price movements in the cryptocurrency market.
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