Bitcoin’s price took a hit recently as it broke down below the $64K support level. This drop has put the cryptocurrency in a critical area that could have a significant impact on the market’s mid-term outlook. The daily chart reveals a pattern of decline, starting from a double top formation at the $68K resistance level. The breach of the $64K level has pushed Bitcoin to test the 200-day moving average. If this level fails to hold, we could see a further decline towards $52K. The Relative Strength Index (RSI) reflecting values below 50% suggests that the momentum is favoring continued bearish movement.
Despite the gloomy outlook on the daily chart, there seems to be a glimmer of hope on the 4-hour chart for Bitcoin. The price has bounced back from the $60K support level with a long wick and is currently trading within the range of $64K and $60K. A retest of the $60K support zone looks likely, given the momentum and market structure indicators. The outcome of this test will play a crucial role in determining Bitcoin’s price trend in the months ahead.
With Bitcoin failing to achieve a new all-time high, it becomes essential to analyze investor behavior for insights into future price movements. One such metric to consider is the Short-Term Holder SOPR, which measures the ratio of profits/losses realized by short-term Bitcoin holders. Values above 1 indicate profit-taking, while values below 1 suggest loss realization. The chart indicates that the STH SOPR has rebounded above 1 following the market’s recovery from the $55K level. However, the recent price drop has caused this metric to slide back towards 1, indicating that short-term holders are only making minimal profits. If this trend persists, we could see an increase in supply in the market as holders attempt to sell off their coins with minimal losses.
The recent price drop in Bitcoin has raised concerns about the cryptocurrency’s mid-term outlook. While the daily chart signals a bearish trend, the 4-hour chart offers some hope for a potential recovery. Monitoring on-chain metrics like the Short-Term Holder SOPR can provide valuable insights into investor sentiment and help anticipate future price movements. As the market continues to navigate through this volatile period, it is crucial for investors to remain vigilant and adapt their strategies accordingly.