Bitcoin’s price has yet to break out of the consolidation phase, as the price has been trapped in an extensive range between $24K and $18K over the past few months. Currently, the market is testing the significant support level at $18K as the asset aims for a rebound to the upside.
The Daily Chart
On the daily timeframe, the price is still consolidating between the significant bearish trendline and the $18K support. The $18K level is currently holding the price and preventing another dump to the downside.
A rebound from this level would cause the market to retest this trendline as well as the 50-day and 100-day moving average lines, found near the $21K mark. If the price breaks above these dynamic resistance levels, a rally towards $24K could be expected.
On the other hand, failing the $18K support could cause a rapid decline towards $15K.
The 50-day and 100-day moving averages also failed to create a bullish cross and the overall market structure remains bearish. This means it’s more probable for the latter scenario to occur.
The 4-Hour Chart
Looking at the 4-hour timeframe, the price is consolidating between the tight range of $18K and $20K. The $20K level recently rejected the price to the downside and appears to be targeting the $18K low again in the near future.
The RSI, which demonstrated an overbought signal while the market was testing the $20K resistance level, is now showing neutral values, indicating that the market is in equilibrium in terms of momentum.
Considering the higher timeframe downtrend, a breakout below the $18K support remains the most probable scenario, and a continuation of the bear market seems likely.
The Puell Multiple can be understood as: “How profitable are mining pools relative to the past year if all newly-created bitcoins were distributed instantly on the market?”. This metric aids market participants in defining market stages from a broader perspective.
A decline in the metric demonstrates that Miner’s revenue is decreasing significantly compared to its costs. During this period, Bitcoin’s price plummets to the point that miners can no longer afford the energy cost. This results in several miners having to cease operations.
Due to the recent massive downswing towards the $18K level, the 100-day moving average has experienced a steep decline and reached its prior lows from 2020. This indicates that the market is undervalued while the bearish market sentiment is likely at its final stages.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.
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.