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Bitcoin’s price has shown significant volatility recently, breaking above its previous minor swing high while simultaneously facing strong rejection. Despite this, the asset is approaching a critical zone, with overall price action pointing toward a bearish trend.
Technical Analysis
By Shayan
The Daily Chart
A detailed review of Bitcoin’s daily chart shows the formation of a clear bearish double-top pattern near the major resistance area of $30K. Additionally, the price is encountering strong dynamic resistance from the middle trendline of the ascending channel. This robust dynamic level has been preventing further price gains for several months.
Furthermore, a clear divergence between the price and the RSI indicator suggests a shift in market conditions from an uptrend to a potential downtrend. If selling pressure takes over, Bitcoin’s next target would be the 100-day moving average, located around the $28K level.
However, recent price action suggests that a rejection from the significant resistance at $30K is likely.
Source: TradingView
The 4-Hour Chart
The 4-hour chart indicates that Bitcoin’s price has entered an extended consolidation phase after reaching the key price zone of $30K. Notably, this critical range aligns with Bitcoin’s previous major swing high from April 14th, which has acted as strong resistance due to increased supply.
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Meanwhile, the price has formed an ascending wedge pattern, which typically signals a potential reversal. Recently, the price surged sharply to the upper boundary of the wedge but faced rejection and dropped rapidly. A break below the wedge’s lower edge could indicate a mid-term reversal.
Ultimately, if rejected, Bitcoin’s next target would be the static support region around $28K.
Source: TradingView
On-chain Analysis
By Shayan
Bitcoin’s price has been volatile, particularly after a significant upward move that brought it close to the crucial $30K resistance level. This surge has fueled speculation about whether Bitcoin can successfully break through this barrier. Examining the futures market provides valuable insights into overall market sentiment.
The chart below displays the Bitcoin taker buy-sell ratio, a key indicator of the intensity of long and short positions.
Recently, this metric has consistently fluctuated below 1 following a sharp decline, with no signs of recovery so far. This indicates that futures traders are predominantly pessimistic about Bitcoin, with their short positions potentially exerting downward pressure on the price in the short term.
Source: CryptoQuant
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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
