Bitcoin’s price has been experiencing a notable decline over the past few days, breaching a crucial support level.
However, there is still a possibility for market recovery soon.
Technical Analysis
By Edris Derakhshi (TradingRage)
The Daily Chart
On the daily chart, the largest cryptocurrency has been declining sharply this week, falling below the key $92K level, which has now turned into a resistance. The current target appears to be the 200-day moving average around the $82K mark.
Despite this drop, the RSI has entered the oversold territory, suggesting a potential market rebound could occur soon, or at least a temporary bullish reversal. For this scenario to play out, the asset must first surpass the $92K level again.
The 4-Hour Chart
Analyzing the 4-hour chart, the price has been making lower highs and lows for the past couple of months since hitting resistance at $109K.
Despite losing both the $100K and $92K support levels, the price might still decline toward the $80K line in the upcoming weeks. However, with the RSI indicating oversold conditions, a short-term pullback or consolidation seems likely.
Sentiment Analysis
By Edris Derakhshi (TradingRage)
Open Interest
As Bitcoin’s price has dropped recently, many futures market traders are beginning to lose patience, resulting in the liquidation of long positions or automatic wreckages. This trend is reflected in the open interest chart, which shows a gradual decline in the number of open future positions during this correction.
The chart indicates that the drop in open interest could have been more significant, given that the market has lost a critical support zone. Thus, the futures market may still be overheated, with further long liquidations potentially occurring in the short term, leading to a lower price.
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