Two phases have been typical for Bitcoin. One is a bull market, where the price rises to an all-time high and then a bear market when it experiences significant falls.
The Weekly Chart
The 200-week moving average is usually reached at the end each bear market.
Surprisingly, the price dropped below the consequential moving average during the recent shakeout and retraced back to the broken level of $24K. The pullback pattern could be used to support another leg towards the $16K mark if it holds. A rebound towards the $27K resistance level is highly anticipated if the cryptocurrency breaks the moving average.
The 4-Hour Chart
The price formed a classic classic pattern known as a flag after a bearish expansion rally. The price tested the $19K support level and the lower edge, but it finally launched a short-term rally that attempted to break the upper boundary. BTC is currently slightly falling, as it failed to surpass the flag’s upper threshold.
However, Bitcoin’s 4-hour chart shows a clear double top price action pattern (a noteworthy reversal pattern). BTC is likely to see another shakeout in order to test the $19K mark. The $16K support level will become the next target if the $19K critical support level is not met. However, the price has a good chance to take advantage of the market inefficiency and imbalance at $22K to launch its next major rally towards the $27K resistance.
Analyse of the On-chain
Bitcoin Short Term Holder SOPR
Bitcoin has bounced from the $20K support zone over the past few weeks following massive losses realized by many market participants.
Short-term holders have been profit-taking due to the recent uptrend. They bought Bitcoin in the last few months for $20K or less. This behavior can be seen on the SOPR chart of short-term holders, which shows SOPR values higher than 1 for the first times since March 2022.
Smart money has taken advantage of the liquidity available to them after a rally for previous profit taking periods. Their selling pressure has contributed towards the beginning of a bearish trend. Their current behavior could be the same as before, and if they increase in size in the coming weeks, it could trigger another bearish continuation.
Marla Brooks – Financial Analysis
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