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The price of Bitcoin is showing very little intention to recover from the recent dip in the past week. Things do not look positive in the short term.
Technical analysis
By Edris
The daily chart
On the daily chart, the price has been consolidating in a tight range over the past few days, following a massive decline from the critical $30,000 resistance zone. The 200-day moving average has also been broken lower, which is a clear signal of a downtrend.
Still, given the oversold signal demonstrated by the RSI, the price is likely to retrace higher in the near term. A retest of the 200-day moving average is very likely, and if the price fails to break above it, a deeper drop could be expected in the coming weeks with a potential return towards the key support level of 20,000. $.
The 4 hour chart
Looking at the 4-hour timeframe, it is evident that the price has been swinging between $27,500 and $25,000 over the past few days. If the market breaks above the $27,500 resistance level in the next few weeks, the important $30,000 zone will likely be tested again.
However, judging by the overall market structure, a further decline would be very likely if the $25,000 level does not hold.
On-chain analysis
By: Edris
Bitcoin Short-Term Holder SOPR
Bitcoin price recently experienced a crash after failing to break above the key $30,000 zone. There are fears that the bear market is far from over.
The following chart depicts the short-term spent production profit ratio (SOPR) measure with a 40-day exponential moving average applied. It indicates the profitability ratio of productions spent in the short term (plays that lasted less than 155 days). Values above 1 indicate that short-term investors are selling at a profit, while values below 1 demonstrate that they are making losses.
As the chart shows, this measure has fallen back below 1 after more than six months. This signal indicates that short-term holders are selling their coins at a loss, which is a behavior typically seen in bear markets. However, things could change if the metric quickly climbs back above one, making the recent dip a bear trap.
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Cryptocurrency charts by TradingView.
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