Bitcoin Price Analysis: Can BTC Reclaim $90K This Week?
Bitcoin is currently traversing a narrow price range, ensnared between the support level of $78K and resistance indicated by the 200-day moving average at $83K. Observers are keenly watching for a breakout from this constricted range, as it is likely to dictate the next major movement in the market.
Technical Analysis
By Shayan
The Daily Chart
In recent weeks, Bitcoin has displayed a bearish market structure, with persistent downward pressure that has forced the price below the psychologically important $80K mark. This breach has activated significant sell-side liquidity, leading to a sharp rebound as sizable buy orders from smart money players entered the market.
This dynamic not only triggered a substantial long liquidation but also helped to cool the heated futures market, providing some stability. However, Bitcoin remains trapped within a pivotal price range, defined by the $78K support level and the $83K resistance from the 200-day moving average. A breakout in either direction will likely signal the following trend.
The 4-Hour Chart
Drilling down to the 4-hour chart reveals a liquidity hunt just below the $80K threshold, as Bitcoin briefly dipped into this zone, only to quickly rebound back upward. Following its slip below the ascending channel, Bitcoin has started forming a descending wedge pattern, indicating a phase of potential consolidation ahead.
In the near term, Bitcoin is expected to oscillate within this wedge, maintaining support above the crucial $78K level. The outcome of a breakout from this pattern—whether upward out of the wedge or downward below $78K—will likely lead to substantial price movements in the respective direction.
On-chain Analysis
By Shayan
Despite the market facing a 30% correction, Bitcoin’s mining difficulty exhibits an upward trend. The market correction that took root in March 2024 saw a temporary hitch in mining difficulty; however, Bitcoin’s subsequent price recovery has bucked bearish expectations. This resilience of mining difficulty amidst market corrections hints at miners holding their ground.
Typically, a decline in mining difficulty signals miner capitulation, where less efficient rigs are turned off. Presently, there are no noticeable indicators of such capitulation occurring. However, should the market correction persist, we may observe a dip in mining difficulty due to less efficient miners exiting.
The apparent holding strategy among miners suggests that the overarching bullish trend remains unbroken. This stage demands patience as market participants digest the evolving dynamics.
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