Bitcoin’s price has been struggling to maintain its upward momentum and has failed to reach a new record high above $75K. There is a possibility of a deeper correction given the current price action. On the daily chart, the price has dropped below the $68K support level and has entered a descending channel, indicating a fake breakout. The $60K support level is a potential target for the upcoming weeks, with the 200-day moving average around $56K serving as a worst-case scenario.
Looking at the 4-hour chart, the price is forming an ascending channel pattern around the $70K resistance zone. However, the channel is breaking to the downside, signaling a bearish reversal. The RSI has entered the oversold region, suggesting a potential bear trap. If the market quickly climbs back inside the channel, the bearish scenario would fail, and a bullish reversal could be expected.
On-chain analysis shows a decline in Bitcoin exchange reserve, indicating strong demand despite the fading bullish momentum. The exchange reserve metric measures the amount of Bitcoin held in exchange wallets, with a decrease indicating dominant demand and an increase suggesting excessive supply. The exchange reserve has been decreasing significantly since the price recovered from the $60K level in May. While technical indicators may not favor a rally, the fundamentals of Bitcoin supply and demand remain strong and could lead to a price surge in the coming months.
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