Bitcoin recently experienced a downtrend, breaking below the significant support level of $59K. However, there has been a notable bullish rebound near the 100-day moving average, indicating the possibility of a resurgence in buying pressure.
Analyzing the daily chart, Bitcoin has undergone a period of sideways consolidation within the price range of $59K to $72K. The recent price action resulted in a decline, breaching the lower boundary of this range and the 100-day moving average. Many long positions were liquidated, leading to a cooling-down period in the markets. However, Bitcoin found significant support at the 0.618 Fibonacci retracement level ($59,395) and the 100-day moving average at $59K. This sparked a bullish reversal, raising expectations for a renewed positive trend in the mid-term. However, a breach below the critical $59K level could trigger another downward movement towards the $56K threshold.
On the 4-hour chart, there was heightened selling pressure after Bitcoin failed to surpass the $68K threshold. This led to a downtrend, breaking below the lower trendline of the wedge pattern and hovering around $59K. Many long positions were liquidated, causing a significant drop and a quick test of the $56K level. However, the price rebounded swiftly, retracing above the wedge’s lower boundary and the $59K support region. Currently, Bitcoin is on the verge of reclaiming its previous daily swing high of $65K, which could continue the bullish trend towards the $68K mark in the short term.
On-chain analysis reveals the Bitcoin Short-Term Holder (STH) Realized Price metric, a crucial indicator used to identify support and resistance levels. This metric calculates the average short-term realized price based on transactions occurring within less than 155 days. It has consistently served as strong support during the bullish run. After the recent decline, the price reached this pivotal level and found support, triggering a bullish rebound. However, if the price breaches below this dynamic support, a significant downturn in the market could occur. Nonetheless, as long as the price remains above the short-term participants’ realized price, the overall trend remains bullish.
In conclusion, despite the recent downward movement, there are signs of a potential bullish revival in the Bitcoin market. However, it is crucial to monitor the critical support levels and the behavior of short-term participants to gauge the market dynamics and anticipate future price movements.