Bitcoin currently finds itself at a crucial juncture, trading just below the $120,000 mark as price movements tighten, and bulls face challenges in breaking through significant resistance levels. Despite maintaining a bullish long-term outlook, a short-term cooldown may persist before another upward movement occurs.
On the daily chart, Bitcoin remains within a broad ascending channel that has been stable for several months. After reaching an all-time high of $124,000, the recent price correction has not compromised the market structure, with the 100-day moving average providing critical support just below the current price at around $110,000. Nevertheless, momentum appears to have waned in recent weeks, with the Relative Strength Index (RSI) trending sideways and the price failing to register new highs. Despite this, bulls retain an advantage as long as Bitcoin remains above the rising trendline highlighted in orange.
A decisive move above $124,000 could spark renewed buying interest, potentially ushering the cryptocurrency into a price discovery phase. Conversely, if the support level around $110,000 breaks down, a swift decline toward the $100,000 to $104,000 range could follow.
Shifting focus to the 4-hour chart, Bitcoin is on the brink of breaching a short-term ascending trendline, creating an ascending triangle with a resistance zone at $117,000. This could signal an early warning of a potential trend reversal or a deeper pullback, given that the price has faced rejection in the $117,000 to $118,000 area on multiple occasions. Furthermore, momentum indicators show significant weakening, with the RSI dipping below 50 and illustrating a clear bearish divergence from recent highs. If Bitcoin fails to swiftly reclaim the broken trendline, additional downside towards the $108,000 region may be imminent, followed by a possible bounce from the major demand area around $108,000.
On the sentiment front, the Long-Term Holder Spent Output Profit Ratio (SOPR) is witnessing a steady decline, even as Bitcoin consolidates near its local highs. This downtrend suggests that long-term holders are less inclined to sell, opting to hold onto their assets instead. Such behavior often points to increased confidence in potential price gains; seasoned market participants appear less eager to realize profits at present levels. Moreover, this trend indicates diminishing supply-side pressure, potentially setting the stage for a significant breakout once buying demand returns. Should this holding pattern continue alongside bullish momentum, it could facilitate the next phase of Bitcoin’s upward journey.
As the cryptocurrency market remains volatile, it is essential for investors to conduct thorough research and exercise caution when making investment decisions.
