Bitcoin’s price has been on a rollercoaster ride, with worries emerging about a potential deeper correction as the $100K level fails to hold. Edris Derakhshi of TradingRage provides a technical analysis of the current market situation, highlighting key factors to watch for in the coming days.
On the daily chart, Bitcoin’s price has been steadily climbing in recent weeks, reaching a new all-time high above $100K. However, the market has shown signs of weakness in the past few days, dropping below $100K and even hitting as low as $92,000. If the market fails to reclaim this area soon, a deeper correction towards $90K and potentially the $80K support zone could be expected in the short term.
Looking at the 4-hour timeframe, the price action appears more uncertain. While the market has been forming higher highs and lows inside an ascending channel, it has been rejected from the higher boundary around $108K. The break below $100K and the RSI indicating a shift to bearish momentum suggest a potential downside move. However, the lower trendline still holds, raising the possibility of a quick recovery above $100K and continued bullish momentum.
Analyzing on-chain metrics, particularly active addresses, can provide valuable insights into Bitcoin’s market dynamics. The 100-day moving average of active addresses has been rapidly increasing during the recent uptrend, coinciding with the breakout above $70K. However, the metric has yet to reach its all-time high, signaling a discrepancy between price action and network activity. If network activity fails to reach a new high and starts declining, a significant correction for Bitcoin could be in the cards.
In conclusion, Bitcoin’s price is showing signs of potential weakness, with a deeper correction looming if key support levels are not reclaimed soon. Technical analysis and on-chain metrics point towards a possible downside move if market momentum continues to shift bearish. Traders and investors should closely monitor price action, active addresses, and other indicators to stay informed about the market’s next move.
