BTC Heading Towards $31K But Is A Correction Near? (Bitcoin Price Analysis)

After an extended period of consolidation, bitcoin price successfully climbed above the crucial $30K resistance level. However, it is important to be careful in the market, especially in the short term.

technical analysis

by: edris

daily chart

On the daily time frame, there was a sharp increase in bitcoin price last week after a strong bounce off the $25K support level. The resistance at $30K has been crossed, and the price is trying to hold its position above it.

However, the RSI indicator is currently showing an overbought condition, indicating a possible correction. If this happens, the 50-day EMA could act as a support near $27,500, followed by the 200-day EMA near the $25K area.

4-hour chart

The 4-hour time frame is showing a similar scenario to the daily chart, with a strong upside momentum and a breakout of resistance. The recent rally started after a breakout from a descending channel, which took the price to a high above $30K.

Nevertheless, it is important to exercise caution due to the clear bearish divergence observed on the RSI indicator. This suggests the possibility of an early consolidation or correction, prompting investors to be cautious.

on-chain analysis

bitcoin long term holder sopr

Following the recent rally in bitcoin, many holders who were suffering losses for several months were now able to sell and make profits.

The Long-term Holders SOPR metric, depicted in charts with the 100-day moving average, indicates the proportion of profit or loss received by long-term holders. A value above 1 indicates profit taking, while a value below 1 indicates loss.

The chart clearly shows that long term holders, who were facing losses for almost a year, have now started selling at profit due to the recent price rise. While this situation is not necessarily harmful, it can increase the supply of bitcoin, and without sufficient demand, it could potentially lead to a drop in price.